Senator Karungo warns Finance Bill, 2026 could hurt local manufacturing and jobs

Kiambu Senator Karungo wa Thang’wa has raised concern over the Finance Bill, 2026, warning that it could weaken local production and put many jobs at risk if passed in its current form. He is urging Parliament to either reject it or make major changes, arguing that it leans in favour of imported finished goods at the expense of local manufacturers.

In a statement issued on Thursday ahead of the parliamentary vote, he said the law as drafted could hurt industries that have been growing in recent years, especially in technology manufacturing and e-mobility, which have been creating jobs for young people.

“Today, as Members of the National Assembly vote on the Finance Bill, 2026, I raise a firm warning on behalf of Kenyan workers, young people, local manufacturers, phone assemblers, e-bike assemblers, boda boda riders, innovators, and the creative economy.”

He said the intention of the Bill should have been to strengthen jobs, support industries, and improve livelihoods, but instead it risks doing the opposite by making local production more expensive compared to imported goods.

“This Bill should have been a jobs Bill. It should have been an industry Bill. It should have been a youth livelihoods Bill. It should have been a Bill to grow local manufacturing and protect Kenyan workers. But as currently drafted, it is the opposite. It is a job destruction Bill. It is an industry-killing Bill. It is a Bill that punishes local assembly, rewards importation and threatens to render our youth jobless,” he highighted.

He particularly pointed to the mobile phone assembly and electric motorbike sectors, saying they are already supporting employment, skills training, digital access, and transport innovation, while reducing fuel dependence and boosting local value chains.

“The most dangerous attack is on locally assembled phones and electric motorbikes. These sectors are already creating jobs, training technicians, supporting sales agents, expanding digital access, strengthening the creative economy, modernising boda boda transport, reducing fuel dependence, and saving Kenya foreign exchange.”

According to him, the proposed tax structure creates an imbalance where imported finished products become cheaper while local assemblers face higher costs on parts and inputs.

“Yet the Finance Bill 2026 makes it cheaper to import finished products while making it more expensive for Kenyan companies to assemble locally. It gives comfort to importers of finished goods while exposing local assemblers to taxes on components, raw materials, spare parts and production inputs,” he said.

He added that fairness in taxation should apply equally across the value chain, whether for importers or local producers, to avoid disadvantaging domestic industry.

“What we are asking for is fairness. What is good for the goose must also be good for the gander. If the Government has zero-rated or exempted finished imported products, then the same treatment must apply to the components, raw materials, spare parts, and production inputs used by local assemblers,” he said.

Karungo warned that if the Bill is not amended, it could lead to factory closures, job losses, reduced investor confidence, and increased costs for consumers and boda boda operators who depend on affordable mobility solutions.

He called on Members of Parliament to carefully review the contested clauses and either amend them or reject the Bill, saying they must protect workers and the future of the country’s economy.