Kenya's Finance Bill 2025: Lower Targets, Faster Revenue, and a Focus on Cleanups

Kenya's Finance Bill 2025: A Leaner Approach with Key Changes Kenya is currently considering the Finance Bill 2025, a significant piece of legislation that has sparked considerable public discussion. This bill proposes several key changes compared to the Finance Bill 2024, which was ultimately rescinded due to public outcry. One major difference lies in the revenue targets. While Finance Bill 2024 aimed for a staggering Sh343 billion, the new bill targets a significantly lower Sh35 billion. This represents approximately 10% of the previous target, indicating a more restrained approach. "The first stark difference between Finance Bill 24 and Finance Bill 25 is just how much was targeted in additional revenue," explains Julians Amboko, a business journalist with NTV Kenya. Amboko's analysis highlights the government's focus on administrative cleanups rather than introducing new taxes. However, the changes to the Value Added Tax Act have not been without controversy. The Finance Bill 2024’s proposal to remove the zero-rating of bread, a staple food in Kenya, led to widespread protests. While the Finance Bill 2025 addresses some VAT issues, it doesn't directly address the bread issue. Another key difference lies in the effective dates. Previous Finance Bills often had multiple effective dates, whereas Finance Bill 2025 primarily uses July 1st, 2025, and January 1st, 2026, as effective dates. This suggests a government push for quicker revenue collection. The government also proposes extending the timeframe for tax refunds from 90 to 120 days, which could impact businesses' cash flow. Despite these changes, there are also similarities. Both bills address the use of data for tax compliance purposes, though with differing approaches. "The government is very keen to get as much revenue as possible as fast as possible," Amboko observes. This analysis provides valuable insight into the Finance Bill 2025, offering a balanced perspective on its potential impact on the Kenyan economy.