The National Assembly has officially passed the Finance Bill 2025, paving the way for it to be sent to President William Ruto for his approval.
The lawmakers voted on the bill on Thursday after reviewing crucial recommendations from the Finance and Planning Committee, which is chaired by Molo MP Kuria Kimani.
All members present in Parliament supported the passing of the bill. The government plans to use it to raise funds to support the national budget for the upcoming financial year.
However, one of the most controversial parts of the bill was removed. Lawmakers scrapped a clause that would have allowed the Kenya Revenue Authority (KRA) to access people’s personal and financial data.
This clause, known as Clause 52, proposed the removal of Section 59A(1B) from the Tax Procedures Act, which currently prevents tax officials from forcing businesses to reveal private customer information.
Treasury Cabinet Secretary John Mbadi had earlier defended this proposal, saying it would help the government deal with tax evasion. He noted that many wealthy individuals still under-report their income and that relying on voluntary tax compliance was not enough.
The Finance Bill 2025 also proposes changes to several taxation laws in Kenya. These include updates to the Value Added Tax (VAT) Act, the Excise Duty Act, and the Income Tax Act.
In addition, the bill includes plans to amend the Miscellaneous Fees and Levies Act, targeting the import declaration fees and the railway development levies charged on certain imported goods.
Government officials said these proposed changes are designed to close tax loopholes that have for years allowed public money to be misused or lost.
This year’s approach by the government appears more cautious compared to last year, when the Finance Bill 2024 faced massive public backlash.
At the time, President Ruto withheld his signature after countrywide protests erupted over the bill’s harsh tax proposals.
The demonstrations turned violent, and several young protesters were reportedly shot and killed by the police. Some of those incidents are still being investigated in court.
Despite warnings and objections from protestors last year, MPs went ahead and passed the 2024 bill, which contributed to the deadly unrest.
Looking ahead, Treasury CS Mbadi also presented the government’s 2025/2026 budget proposals in Parliament, which include several changes to income tax rules.
He said these reforms are aimed at improving revenue collection, reducing loopholes in tax laws, and making the tax system fairer for both workers and businesses.
The total budget for the 2025/2026 financial year has been set at Ksh4.29 trillion. The government plans to fund it through a mix of tax revenues, loans, and grants from development partners and international lenders.
Overall, the Finance Bill 2025 marks another major attempt by the government to balance its books while trying to ease public concerns about taxation and accountability.
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