Kenyans urged to submit views on Finance Bill 2025 before deadline

The National Assembly has opened a window for public input on the Finance Bill 2025, giving Kenyans the opportunity to express their views before the May 27 deadline.

Citizens, businesses, and lobby groups can submit their feedback in writing, either by hand to the office of the Clerk of the National Assembly or via email to the Clerk or the Departmental Committee on Finance and Planning.

In addition to written submissions, the Committee will hold face-to-face consultations with various stakeholders to collect further perspectives.

Despite the public participation efforts, many remain sceptical about the process, recalling previous instances when public concerns were disregarded.

Last year, protests erupted over the Finance Bill 2024, with many citizens feeling their voices were ignored.

These demonstrations, led mostly by young Kenyans, turned violent after police responded with force, including live bullets, resulting in fatalities.

The Finance Bill 2025, unlike its predecessor, does not introduce any new tax rates. Instead, it focuses on simplifying tax administration, removing outdated provisions from tax laws, and eliminating certain cross-references that no longer apply.

According to  Samuel Njoroge, Clerk of the National Assembly, "The Bill contains proposals relating to revenue-raising measures, including provisions to ease tax administration and clean up the statute book of terms and cross-references to provisions that have previously been repealed."

However, the Bill includes provisions that may indirectly raise the cost of living. For example, certain goods that are currently exempt from VAT could be moved to the VAT-exempt category.

This change affects products like electric buses, motorcycles, solar batteries, animal feed raw materials, and transportation costs for sugarcane, all of which could face higher costs for consumers as producers might pass on the increased charges.

"The issue of disposable income has not been addressed. While the government has not raised tax rates, it still aims to collect Sh175 billion. This Bill doesn’t offer much relief for people, and the effects will likely be felt through the increased costs of certain goods," said Alex Kanyi, a partner at Cliffe Dekker Hofmeyr, during an interview on Spice FM.

The Finance Bill 2025 also proposes to tighten VAT regulations by transferring some goods from the exempt list to the taxable category, introducing a 16 per cent VAT charge on certain items that were previously outside this scope.

These changes are part of the government's efforts to raise an estimated Sh175 billion to support national revenue.

The Parliamentary Budget Office (PBO) has highlighted concerns over these changes, noting that the removal of VAT exemptions could hurt local producers.

"The Bill proposes tax on goods or services that were initially exempt or zero-rated if later used inconsistently with their intended purpose. While this targets tax evasion, there is a risk that producers will face higher costs, which will inevitably be passed down to consumers," the PBO said.

Another significant change in the Bill is the proposal to expand the powers of the Kenya Revenue Authority (KRA), granting the taxman access to more company data.

This move, part of a broader revision to the Tax Procedures Act, was met with concern last year and continues to draw criticism over potential privacy violations.