KDRTV News – Nairobi: Kenya’s proposed Finance Bill 2025, intended to fund the KSh 4.26 trillion 2025/26 budget, has ignited widespread opposition from citizens and businesses alike, despite Treasury Cabinet Secretary John Mbadi’s assertion that it introduces no new taxes. The National Assembly Committee on Finance has concluded public participation, gathering over 1,000 online memoranda and hearing from more than 200 stakeholders, highlighting deep concerns across various sectors.
A primary point of contention is the potential increase in the cost of living. The Bill proposes reclassifying several goods from zero-rated to tax-exempt under Value Added Tax (VAT), meaning producers cannot claim VAT refunds, a cost likely to be passed on to consumers. The Kenya Association of Manufacturers (KAM) and the Ministry of Agriculture warn this will increase production costs and consumer prices from July 1, 2025. Consumer advocacy groups fear this could exacerbate inflation, disproportionately affecting low-income households.
Significant data privacy concerns have also emerged. An amendment to the Tax Procedures Act seeks to grant the Kenya Revenue Authority (KRA) broad access to business data and customer personal information . This proposal, opposed by groups like OKOA Uchumi, the Kenya Association of Manufacturers, and telecommunications giants like Safaricom, is seen as an unchecked surveillance power that could violate constitutional rights and deter investment. Legal experts argue it contradicts Article 31 of the Constitution and the Data Protection Act.
The Bill also targets key economic sectors. Property developers, including the Kenya Property Developers Association, oppose the repeal of tax rebates for companies constructing over 100 affordable housing units annually, arguing it undermines the government’s housing agenda and will drive up property prices. The aviation industry is bracing for higher operational costs due to proposed multiple taxes on aircraft and parts, potentially impacting ticket prices and Kenya’s regional hub status.
Furthermore, the Bill’s proposal to limit corporate tax loss carry-forwards to five years, a departure from the current indefinite period, has drawn criticism from capital-intensive businesses, including tech and telecom firms, who argue it discourages long-term investment.
Other notable proposals include an increase in the tax-exempt per diem allowance from KSh 2,000 to KSh 10,000, which OKOA Uchumi views as a disproportionate tax shelter for senior officials.
While the Bill introduces Advanced Pricing Agreements (APAs) to enhance tax certainty for complex international transactions, and reduces the digital asset tax from 3% to 1.5% , the widespread opposition underscores the public’s demand for a more equitable and transparent tax framework.
The ongoing public engagement highlights the critical need for policymakers to address these concerns before the Bill is signed into law by the end of June 2025.
