Finance Bill 2026 Kenya — Live Tracker

The Finance Bill 2026 is the most politically watched tax legislation in Kenya since the 2024 protests. After Treasury announced — and then shelved — a standalone Tax Laws (Amendment) Bill 2026, all proposed changes are now expected to be consolidated into a single Finance Bill arriving by the constitutional deadline of 30 April. This page tracks every formal proposal feeding into that Bill from Treasury, KEPSA, the Kenya Bankers Association, and the World Bank — and will update with the actual text within 24 hours of publication.

Timeline so far

• February 2026
  President Ruto announces in Kiambu that workers earning under KSh 30,000 should pay zero PAYE, calling it a "survival salary that government has no business taxing."
• February 2026
  2026 Budget Policy Statement published by Treasury, signalling broadening of the PAYE base rather than rate cuts. Our analysis here.
• February 2026
  Treasury indicates Tax Laws (Amendment) Bill 2026 will be tabled with a 0% PAYE rate up to KSh 30,000 and 25% on the next KSh 20,000.
• February 2026
  Kenya Bankers Association (KBA) submits 10-point proposal to Treasury, recommending a 30% maximum PAYE band and KSh 30,000 tax-free threshold.
• March 2026
  CS John Mbadi tells the Budget & Appropriations Committee that the standalone Tax Laws (Amendment) Bill 2026 is being dropped, with all proposals consolidated into Finance Bill 2026 instead — citing legislative fatigue and the short timeline.
• March 2026
  Treasury PS Chris Kiptoo conditions the proposed PAYE relief on "expansion of the tax base" — language that observers read as walking back the unconditional KSh 30,000 exemption.
• April 2026
  Kenya Private Sector Alliance (KEPSA) submits proposals to the National Assembly Finance Committee, calling for a 30% top PAYE band (down from 35%) and personal relief raised from KSh 2,400 to KSh 3,000/month.
• By 30 April 2026
  Constitutional deadline for tabling Finance Bill 2026. This page will be updated within 24 hours of publication.
• May–June 2026
  Parliamentary debate, public participation hearings, and amendments by the Finance & National Planning Committee.
• By 30 June 2026
  Bill must be passed by the National Assembly. Most provisions take effect 1 July 2026.

The competing PAYE proposals — side by side

Four formal proposals are on the table, each with very different distributional consequences. Until Treasury publishes the actual Bill, we don't know which (if any) will be adopted. The table below compares each at the band-edge level.

*The Treasury proposal's silence on the KSh 2,400 personal relief — when paired with a 0% base band — has prompted public concern that the relief might be withdrawn. Treasury has not yet clarified.

What each proposal means in practice

For a worker earning KSh 30,000/month

Under current law, this worker pays roughly KSh 590 in PAYE after personal relief. Under Treasury's shelved proposal, they would pay KSh 0 — but only if the personal relief survives intact, which is unclear. Under the KBA proposal, they also pay KSh 0. Under KEPSA's proposal (which keeps the 0–24,000 band at 10%), they continue paying ~KSh 600. Net difference: about KSh 7,000 per year between the most generous and least generous options.

For a worker earning KSh 100,000/month

The differences widen significantly. Current law produces a take-home of approximately KSh 70,000 (per our Net→Gross analysis). The KBA proposal — with a 25% middle band and 30% cap — would push that closer to KSh 76,000. The KEPSA proposal lands somewhere in between. The Treasury Feb 2026 proposal is essentially neutral at this income level since the 30% middle band is unchanged.

For a worker earning KSh 1,000,000/month

The biggest swings happen here. Under current law, this worker faces the 35% top band on more than KSh 200,000 of monthly income. The KBA and KEPSA proposals both cap PAYE at 30%, saving this worker approximately KSh 30,000–40,000 per month. This is why the proposals are politically contentious — the absolute-shilling benefit accrues disproportionately to top earners, even though the percentage-band reductions look modest.

Beyond PAYE: what else to watch in Finance Bill 2026

The Finance Bill is never just about PAYE. Based on the Budget Policy Statement and post-publication advisory firm commentaries, here are the other measures likely to surface:

• Significant Economic Presence Tax (SEPT) — Treasury has already signalled wanting to expand SEPT scope to cover all internet-mediated business income (currently limited to digital marketplaces). The KSh 5 million exemption may be removed.
• VAT exemption rationalisation — Treasury has flagged "tax expenditure" reviews. Expect select zero-rated and exempt items to move to standard-rated.
• Withholding tax scope — likely expansion to additional payment categories. The current 5-working-day remittance rule may be reformed to month-end.
• Excise duty on emerging products — virtual assets (10% in Finance Act 2025) and digital lending may see further refinement.
• Turnover tax — KRA has been clear that informal-sector enforcement is the priority. Whether this means new TOT thresholds, simplified filing, or just enforcement intensification remains to be seen.
• IDF and RDL on imports — minor adjustments are common in every Finance Bill.
• Tax Procedures Act amendments — administrative provisions affecting penalties, objections, and refund timelines.

How to read the Bill yourself when it drops

The Finance Bill text will be published on three places simultaneously:

1. The Kenya Gazette (gazette.go.ke) — the legally definitive version
2. The National Assembly website (parliament.go.ke) — typically with the explanatory memorandum
3. The Treasury website (treasury.go.ke) — usually accompanied by a press briefing

The Bill will be 80–150 pages. Most of it will be technical amendments to existing Acts (Income Tax Act, VAT Act, Excise Duty Act, Tax Procedures Act, Miscellaneous Fees and Levies Act). The substantive policy changes are usually in the first 20–30 clauses. The Schedule at the back lists rate changes by item — that's where excise duty and VAT changes are buried.

If you want the analysis without reading the Bill, this page will publish a plain-English summary the same day. Bookmark it or subscribe to our RSS feed to get notified.

Why this Bill matters more than usual

Three factors make Finance Bill 2026 unusually consequential:

1. The political backdrop. Memory of the 2024 Finance Bill protests still defines public expectations. Any measure perceived as squeezing salaried Kenyans further is politically lethal. This is why Treasury has emphasised "broadening the base" rather than "raising rates" in every public communication.

2. The fiscal gap. Treasury missed its FY 2025/26 revenue target by KSh 115 billion. Without new measures, the FY 2026/27 budget faces an even larger gap. Something has to give — either spending cuts (politically hard), more borrowing (already at debt-sustainability limits), or revenue measures.

3. The base-broadening promise. The Government has staked its political credibility on "broadening" rather than "deepening" the tax base. If the Bill quietly raises rates on existing taxpayers anyway — through reduced reliefs, expanded definitions, or new excise items — it will be politically exposed. If it genuinely shifts the burden to the informal sector and high-net-worth individuals, it will need administrative capacity to enforce, and that's a separate question.

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