President William Ruto has officially signed into law the Finance Bill 2025, alongside the Appropriations and Supplementary Bills, in a move that is expected to reshape the country’s taxation framework and budgetary execution for the 2025/2026 financial year.
The signing ceremony, held on Thursday June 26, 2025 at State House Nairobi, took place under tight security and in the presence of both Majority and Minority leaders from Parliament, just days after the National Assembly approved the controversial bills.
This year’s signing was particularly symbolic, coming amid renewed anti-tax protests led by Gen Z activists — reminiscent of last year’s Finance Bill 2024 backlash.
Despite the pressure, this time the President held firm.
“The Finance Act 2025 marks a bold step toward fiscal sustainability, business growth, and a fairer tax regime,” President Ruto said after signing the bill. “We have listened to Kenyans, and this law reflects a delicate balance between revenue generation and citizen well-being.”
Key features of the new law include the scrapping of tax deductions on retirement gratuity and the expansion of mortgage tax relief. Kenyans will now qualify for the relief whether they purchase, build, or construct homes through SACCOs or personal loans — a change aimed at spurring housing development and ownership.
In a win for salaried workers, the bill maintains the existing Pay-As-You-Earn (PAYE), tax bands and blocks the Kenya Revenue Authority (KRA) from accessing private data without proper legal procedures — after MPs pushed back on earlier invasive proposals.
Essential commodities such as bread, sanitary towels, and infant formula have been zero-rated, while corporate tax incentives have been extended to key manufacturing and technology sectors to attract investment.
In tandem, President Ruto assented to the Appropriations Bill 2025, authorizing the National Treasury to withdraw Ksh1.88 trillion from the Consolidated Fund. The funds will support government services for the financial year ending June 30, 2026.
Ministries, Departments, and Agencies (MDAs) will also be allowed to spend Ksh671.99 billion in Appropriation-in-Aid — internally generated revenue collected by the entities themselves.
The total budgetary framework outlines Ksh1.805 trillion for recurrent expenditure and Ksh744.52 billion for development projects, signaling the government’s intent to maintain service delivery while accelerating infrastructure and social welfare programs.
