The Parliament of Kenya has officially published the Finance Bill 2026, setting the stage for another major national debate on taxation, revenue collection, and government spending as Kenyans await details on how the proposed measures could affect businesses and households.
In an update issued through its Facebook account on Saturday, May 9, 2026, Parliament said the bill, which was published on May 5, was submitted to the National Assembly by the Cabinet Secretary for the National Treasury and contains a series of proposals aimed at raising government revenue and reviewing tax administration.
According to Parliament, the proposed legislation seeks to amend six major tax laws that play a central role in the country’s revenue system.
Six major tax laws targeted
The targeted laws include the Income Tax Act, the Value Added Tax Act, the Excise Duty Act, the Tax Procedures Act, the Miscellaneous Fees and Levies Act, and the Stamp Duty Act.
The proposed changes are expected to affect tax administration, compliance requirements, and government revenue collection across several sectors of the economy.
“𝐔𝐏𝐃𝐀𝐓𝐄: 𝐓𝐡𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐁𝐢𝐥𝐥, 𝟐𝟎𝟐𝟔, has been published. The Bill published on May 5, 2026 was submitted to the National Assembly by the Cabinet Secretary for the National Treasury and formulates proposals relating to revenue-raising measures, including liability to, and collection of taxes,” the notice reads in part.
“The Bill proposes to amend the Income Tax Act (Cap. 470), the Value Added Tax Act (Cap. 476), the Excise Duty Act (Cap. 472), the Tax Procedures Act (Cap. 469B), the Miscellaneous Fees and Levies Act (Cap. 469C) and the Stamp Duty Act (Cap. 480).”
Among the notable proposals under the Income Tax Act is a plan to shift the annual tax return filing deadline from June to April.
The Finance Bill 2026 seeks to amend Section 52 of the Income Tax Act by replacing the phrase “within a reasonable time, not being less than thirty days from the date of service of the notice” with “by the last day of the fourth month following the end of the person’s year of income.”
The proposal also replaces the current wording in subsections (i) and (ii) of Section 52(1), which sets filing at “not later than the last day of the sixth month,” with a new deadline of “by the last day of the fourth month following the end of the person’s year of income.”
The Bill further introduces a new subsection requiring taxpayers filing nil returns to submit them within one month after the end of the financial year.
Other proposed tax measures include a 25 per cent excise duty on mobile phones and a new 5 per cent presumptive tax framework targeting mitumba imports.
On digital financial services, the bill seeks to standardise VAT taxation across fintech platforms, close regulatory gaps, and ensure tax neutrality within the sector.
The proposals also introduce withholding tax on interchange and merchant fees in a move aimed at strengthening tax collection at source through direct deductions from previously under-taxed financial transaction streams.
The Finance Bill 2026 further proposes a deemed dividend tax applying to 60 per cent of undistributed income. The measure is intended to limit prolonged tax deferral and ensure retained earnings are commercially justified instead of being used to avoid taxation.
The bill also proposes amendments to the Road Maintenance Levy Fund Act, including a reduction in the amount allocated to the Road Annuity Fund from Sh3 to Sh1.50.
“The Bill published also seeks to amend the Road Maintenance Levy Fund Act, (Cap. 427) to reduce the amount payable into the Road Annuity Fund from three shillings to one shilling and fifty cents,” the notice reads.
The Finance Bill 2026 additionally proposes an increase in residential rental income tax from 7.5 per cent to 10 per cent. The proposal is backed by enforcement measures, including agent-based withholding systems aimed at improving compliance.
Parliament stated that the bill contains proposals relating to “revenue-raising measures, including liability to, and collection of taxes,” signalling continued efforts by the government to strengthen domestic revenue mobilisation.
The publication of the Finance Bill 2026 now opens the parliamentary review process, where lawmakers, businesses, civil society groups, and members of the public are expected to scrutinise the proposals before debate in the National Assembly.
The bill is expected to spark widespread public discussion in the coming weeks, particularly over the possible impact of the proposed measures on living costs, business operations, digital services, and household spending at a time when many Kenyans continue to face economic pressure.