Mbadi: Finance Bill 2026 measures aim to simplify taxes
National
By
Mike Kihaki
| May 25, 2026
National Treasury Cabinet Secretary John Mbadi has defended the Finance Bill 2026, saying the government has deliberately avoided introducing punitive taxes and instead focused on simplifying tax administration, widening the tax base, and protecting struggling Kenyans.
Speaking during a press briefing, Mbadi dismissed claims that the bill seeks to overburden citizens, insisting the Treasury understands the economic difficulties facing many households.
“The National Treasury has noted that some commentary has mixed proposals contained in the current Finance Bill with passed proposals and interpretations that do not accurately reflect the content and intent of the Finance Bill 2026,” Mbadi said.
He acknowledged that the government faces limited options in raising revenue due to public concerns over high taxation and increasing debt servicing obligations.
“We are alive to the fact that measures of raising more taxes are limited because Kenyans have complained loudly before about high taxation. We are also aware of limited options in borrowing money to finance our budget,” he said.
Mbadi explained that the bill seeks to promote “equity, fairness and simplicity” in taxation by ensuring all individuals and businesses earning income contribute fairly.
One of the most controversial proposals has been the planned 25 percent excise duty on mobile phones, which critics argue will hurt youth, online workers and digital businesses. However, Mbadi clarified that the proposal is not a new tax but a restructuring of existing charges.
“Mobile phones are currently subject to multiple domestic taxes and levies, including 16 percent VAT, 10 percent excise duty, 25 percent import duty and other levies, creating an aggregate tax burden of about 55.5 percent,” he said.
“Under the proposed bill, we seek to simplify the structure by replacing the fragmented framework with a single 25 percent excise duty collected upon activation of the phone.”
He said the changes would eliminate VAT, import declaration fees, and railway development levies on mobile phones while also removing the 25 percent import duty, ultimately reducing the total tax burden.
The CS also defended proposals targeting virtual assets and digital transactions, saying emerging sectors cannot remain outside the tax system while traditional businesses continue paying taxes.
“Virtual assets are a new phenomenon in town and anything new that is producing revenue must be subjected to tax,” Mbadi said.
He added that proposed reporting requirements for virtual asset service providers are intended to enhance transparency and improve tax administration.
Mbadi further justified plans to impose withholding tax on card and digital payment services involving foreign firms such as Visa and Mastercard.
“Why should Kenyans pay for infrastructure and others come, benefit from our economy and earn income without leaving a portion of it?” he posed.
The Finance Bill 2026 comes amid heightened public sensitivity following the deadly anti-tax protests witnessed in 2024 after controversial tax proposals sparked nationwide demonstrations.
Mbadi said the current bill contains measures aimed at cushioning citizens, including tax amnesty for struggling taxpayers and exemptions targeting pension beneficiaries and dependents of deceased persons.
“This is a bill that Kenyans need. We welcome constructive engagement but not propaganda,” Mbadi said.