Finance Bill 2026 sparks debate as push to realise additional taxes faces backlash over mobile phone tax, digital payments and rising cost of living pressures.

📻 Breaking It Down

NAIROBI, Kenya, May 29 — The Finance Bill 2026 has reignited a familiar but increasingly uneasy national debate: how much more can the state extract from taxpayers before revenue mobilisation collides with economic reality.

Presented as part of Treasury’s broader plan to fund government spending and narrow the fiscal deficit, the Bill seeks to raise about Sh120 billion in additional revenue.

It comes at a time when households are grappling with persistent living costs, businesses are contending with weak consumer demand, and doubts persist over whether the Kenya Revenue Authority (KRA) will meet its current collection targets.

📌 What You Need to Know

The proposed changes—covering digital transactions, mobile phones, tax administration, data access, excise duties and VAT treatment of key goods—have triggered widespread criticism from economists, tax experts, business groups and consumers, many of whom argue the measures lean heavily toward revenue generation with limited short-term relief for households.

KPMG Associate Director Kiema Onesmus said the Bill reflects the constraints of a tax-dependent fiscal model.

“You cannot tax yourself to prosperity. The sad reality is that, as a country, that is where we seem to be heading because taxes remain our main source of revenue,” he said.

“The challenge is that we appear to be left with two options: either taxing ourselves or borrowing, and we are reaching a point where we are milking the cow dry.”

His remarks come as scrutiny intensifies over KRA’s revenue ambitions. The authority is targeting about Sh2.7 trillion in the 2025/26 financial year, rising to approximately Sh2.9 trillion in 2026/27—an increase of nearly Sh200 billion.

Analysts say the jump raises questions about feasibility in an economy still weighed down by subdued private sector growth, declining purchasing power and elevated operating costs.

📰 Source: Capital FM Kenya