KDRTV News – Nairobi: The Kenyan National Assembly has successfully passed the Finance Bill 2025, a legislative milestone collected to generate an additional Sh24 billion in revenue for the upcoming financial year.
The bill, now awaiting President William Ruto’s signature to become law, is set to redefine Kenya’s tax policies and revenue collection strategies for the 2025/26 financial year.
This development follows extensive deliberations and significant amendments, reflecting a delicate balance between government revenue targets and public concerns.
A key victory for citizens’ privacy emerged as Members of Parliament (MPs) rejected a contentious clause that would have granted the Kenya Revenue Authority (KRA) unrestricted access to personal records.
The Finance and Planning Committee, led by Molo MP Kimani Kuria, argued that such a provision would violate Article 31(c) and (d) of the Constitution, which safeguards the right to privacy.
Existing legislation, specifically Section 60 of the Tax Procedures Act, already provides mechanisms for data access, including the requirement of a judicial warrant.
Furthermore, legislators pushed back against the Treasury’s proposed expansion of Pay As You Earn (PAYE) tax bands, which included introducing five new brackets and allowing the Cabinet Secretary to adjust rates for inflation.
This rejection emphasizes parliamentary intent to prevent unchecked executive power over taxation. The bill also maintains zero-rated status for essential items like locally assembled mobile phones, electric bicycles, solar batteries, and animal feed inputs, rejecting attempts to reclassify them as exempt.
Incentives for the manufacturing and housing sectors, such as the 15% corporate tax rate for local motor vehicle assembly and construction of at least 100 residential units, were also retained.
In a move to simplify pension taxation, MPs supported a full exemption on all pension payments, whether lump sums or installments, and removed redundant legal provisions for clarity.
While the definition of Significant Economic Presence Tax (SEPT) was expanded to include websites and electronic networks, the proposed Sh5 million threshold for SEPT applicability was rejected due to concerns about potential revenue losses and enforcement complications.
This legislative journey highlights the dynamic interplay between government fiscal needs and public demands for transparency and protection of rights.
