President William Ruto has signed the Finance Bill, 2026 into law, paving the way for the implementation of the Sh4.8 trillion budget and setting the government’s spending and revenue agenda for the 2026/27 financial year.
The move marks the final legal step for government spending and revenue collection plans, despite sustained political and public debate over its implications on the cost of living and taxation fairness.
The Finance Bill comes at a time the government is under pressure to finance an expanding development agenda, rising debt obligations, and recurrent expenditure, including salaries and key public services.
The budget is the largest in Kenya’s history, with significant allocations directed toward education, health, agriculture, and fuel stabilisation.
Education remains the single largest beneficiary, receiving Sh784 billion, while health funding has increased to Sh175 billion and agriculture to Sh63 billion. The government has also set aside Sh21.5 billion for fuel stabilisation in an attempt to cushion households against global oil price volatility.
Treasury officials argue the Finance Act is critical in ensuring predictable revenue flows, strengthening compliance, and closing loopholes that have historically undermined tax collection.
The Bill was passed in the National Assembly on June 18, 2026, after a heated debate that exposed divisions within Parliament. It sailed through the Third Reading with 122 votes in support, 40 against, and 187 abstentions.
The opposition camp argued that certain provisions lacked sufficient public participation and risked increasing the cost of living. However, government-allied MPs insisted the Bill was necessary to sustain national development priorities.
Speaking during the assent ceremony, Ruto defended the legislation, insisting it does not introduce new taxes on ordinary citizens but instead enhances fairness in the tax system.
He added that the government is targeting tax evasion and illicit financial flows rather than increasing the burden on households.
“We are pursuing tax avoidance, not taxpayers; offshore schemes, not ordinary wages; and leakages, not livelihoods,” Ruto said.
The President also dismissed reports suggesting new taxes on land, mitumba, bottled water, mobile money transactions, airtime, and data, terming them misinformation. “Contrary to misinformation, there are no taxes on freehold land, no taxes on mitumba, no changes to rental income tax, no tax on bottled water, no new tax on M-PESA or mobile money transactions,” he said.
President Ruto has described the move as a decisive step toward financing Kenya’s development agenda and advancing what he termed a fair and inclusive tax system.
