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The National Assembly has cleared the path for the Finance Bill 2025 to become law, forwarding it to President William Ruto for assent. After a heated debate and intense committee scrutiny, lawmakers voted to pass the Bill that outlines the fiscal strategies for the 2025/2026 financial year.
This legislative move sets the framework for funding a Ksh4.29 trillion national budget, a sum that reflects Kenya’s deepening economic commitments at a time of public unrest over rising costs of living and taxation fatigue.
One of the most contentious proposals—Clause 52—was decisively removed from the final version of the Bill. This clause had sought to give the Kenya Revenue Authority (KRA) intrusive powers to access personal and financial data, igniting widespread opposition from civil society and privacy advocates.
The removal of this clause signals the government’s recognition of public concerns around data security and the overreach of state surveillance. The existing legal provision under Section 59A(1B) of the Tax Procedures Act, which shields consumers from unauthorized data requests, will remain intact for now.
While backing down on surveillance, the government has doubled down on its revenue agenda. Treasury CS John Mbadi defended the bill’s broader framework, arguing that it aims to close gaps in the tax system and broaden the tax base to enhance equity. Amendments touch on key legislation including the Income Tax Act, the VAT Act, and the Excise Duty Act.
These reforms, according to Mbadi, are designed to streamline collections, address historic tax leaks, and ensure high-income earners pay their fair share. Specific levies—such as the import declaration fees and railway development levies—are also under review, as the state seeks more robust financing from trade-related taxation.
This year’s finance legislation follows a much more cautious trajectory compared to last year’s disaster. In 2024, President Ruto faced immense pressure to withhold his assent to the Finance Bill after mass youth-led demonstrations spiraled into tragedy. Scores were killed—many by police gunfire—following the bill’s passage, leading to ongoing court cases and widespread public distrust.
That memory looms large as the 2025 version of the bill approaches the final phase. By excluding controversial clauses and refining its approach, the government appears to be sidestepping another round of mass unrest—at least for now.
The Finance Bill 2025 plays a dual role—meeting Kenya’s growing fiscal obligations while attempting to calm the volatile political landscape. The Treasury is under pressure to show results on revenue without suffocating the taxpayer.
CS Mbadi’s pitch to the Assembly positioned the bill as part of a broader reform to clean up tax laws and end exploitative tax shelters that have bled public coffers. In theory, this could shift the burden away from lower-income households and toward higher-income segments, but public skepticism remains strong.
With the Bill now on his desk, President Ruto faces a political test. Will he sign it without triggering fresh unrest, or will he issue reservations as he did last year? While the government has attempted to be more measured this time around, civil society organizations and youth groups are already mobilizing to keep pressure on the presidency.
The coming days will reveal whether the administration has struck the right balance—or merely postponed another wave of dissent.
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