Ruto Signs 2026 Finance Bill into Law: Why Some Kenyans Opposed It

President William Ruto has signed the Finance Bill 2026 into law, paving the way for several tax changes that will affect individuals, businesses, landlords and users of digital financial services.

While the government says the new law will help increase revenue, some Kenyans, business groups and experts had opposed several proposals, arguing that they could increase the cost of living and affect economic growth.

Rent Prices Could Rise

One of the major concerns raised by Kenyans is the increase in rental income tax from 7.5 per cent to 10 per cent.

Landlords who will be paying the higher tax may decide to transfer the extra cost to tenants by increasing house rent. Tenant groups and housing stakeholders warned that the move could make housing less affordable for many families.

Higher Transaction Fees

The new law has also introduced VAT on digital financial services. This means banks, mobile money providers and fintech companies could adjust their charges, making some online transactions and money transfers more expensive.

Critics say the move could slow Kenya’s progress towards a cashless economy.

New Tax Return Deadline

Another major change is the shortening of the tax return filing period. Individuals and companies will now be required to file their tax returns by April 30 instead of June 30.

Business groups argued that the shorter period could make compliance difficult and increase the risk of penalties for taxpayers.

Concerns Over Mitumba Imports

Some Kenyans also opposed the proposed tax measures affecting imported second-hand clothes, commonly known as mitumba.

Critics argued that millions of low-income earners depend on affordable mitumba clothes and any additional taxes could push prices higher.

Betting Industry Concerns

Players in the gaming sector expressed concerns over the 20 per cent betting tax, warning that higher taxes could push some users to foreign and unregulated betting platforms.

Experts also warned that some provisions affecting company profits could discourage businesses from reinvesting their earnings.

The Finance Bill 2026 sparked heated debate across the country before being passed and signed into law, with supporters saying it will boost government revenue while critics fear it could increase the financial burden on ordinary Kenyans.

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