The Finance Bill, 2026, has triggered a fierce, sharply divisive debate that has exposed deep divisions in Parliament and revived memories of the deadly anti-tax protests of 2024.
The discussion took a political turn for much of Parliament’s time on Tuesday and Wednesday, with lawmakers arguing from the sides they support.
President Ruto’s allies pushed back against what they described as falsehoods being spread about the tax laws and the 2026-27 Budget.
The camp led by Majority Leader Kimani Ichung’wah, together with partners in the broad-based arrangement under Minority Leader Junet Mohamed, mounted a strong defence of the Bill.
Opposition-aligned MPs argued that punitive clauses remained in the proposal, even as the Finance Committee, led by Molo’s Francis Kimani, insisted the Bill had moved beyond the published version and had become a product of public participation.
“We got views from over 100,000 Kenyans,” he said.
The debate, marked by several heated moments, is seen as laying the groundwork for renewed political tension before the second anniversary of the demonstrations.
The clash came just days before planned remembrance events for those who died in the protests that ended with demonstrators storming Parliament.
Opposition figures led by Kalonzo Musyoka and Rigathi Gachagua have called for commemorations for those killed during the 2024 anti-Finance Bill protests.
The anniversary falls on June 25, Thursday next week.
Pressure is building, with several Gen Z activists saying they will not accept President William Ruto’s apology, made when he unveiled a Sh2 billion compensation package for the victims.
“The true measure of the apology will be on June 25, whether we are going to lose one young mind or not, the police need to protect young people,” one activist said.
The demonstrations forced Ruto’s administration to withdraw the Finance Bill, 2024, after widespread public anger over proposed tax increases.
As debate on the Finance Bill, 2026, drew to a close amid sharp exchanges, some legislators warned that Parliament risks repeating the mistakes that fuelled the previous year’s unrest.
Kitutu Chache South MP Antony Kibagendi was among those who raised concerns after debate on the Bill was closed.
“They again want to pass the Finance Bill with numerous oppressive clauses by force. We have been denied an opportunity to debate,” he said.
The row has been fuelled by conflicting interpretations over whether the Bill introduces new taxes or simply reforms tax administration.
While defending the legislation, chairman Kimani described the Bill as a measure intended to modernise the tax system rather than burden Kenyans with fresh levies.
“The Finance Bill, 2026, is not merely a revenue-raising instrument; it is also a policy reform framework aimed at strengthening Kenya’s tax system,” Kimani told the House.
He argued that, unlike previous Finance Bills that focused heavily on introducing taxes, the current proposal seeks to simplify tax laws, remove ambiguities and strengthen compliance.
Kimani also sought to calm fears over several controversial provisions, including those on rental income and mobile phones.
According to the MP, there is no proposal to raise taxes on rental income earned by resident landlords.
He said provisions affecting non-resident landlords only clarify existing law.
On mobile phones, Kimani said the committee had rejected proposals to shift taxation from importation to activation because the country lacked adequate systems and legal frameworks to implement such a change.
Kesses MP Julius Ruto said the Bill focuses on expanding the tax base rather than increasing the tax burden.
“This particular Finance Bill, 2026, has broadly focused on expanding the tax regime rather than increasing it vertically,” he said.
However, opposition lawmakers and several independent-minded MPs presented a sharply different view and resisted the Bill.
Kathiani MP Robert Mbui dismissed the Bill as punitive and accused the Executive of disguising tax increases as administrative reforms.
“I rise to oppose this draconian, punitive, knee-on-the-neck-of-Kenyans Finance Bill, 2026,” Mbui said.
He particularly criticised a proposal allowing the Kenya Revenue Authority to use third-party data to determine tax liabilities, arguing that businesses operate differently and should not be assessed on broad data assumptions.
Mbui also questioned why President Ruto’s promise of tax relief for workers earning below Sh30,000 had not been included in the Bill.
The issue of tax relief for low-income earners emerged repeatedly during the debate.
Kiharu MP Ndindi Nyoro accused the government of making public promises that were not reflected in legislation.
“We have seen the head of state talking about exemption of PAYE for Kenyans earning below Sh30,000; that has not been captured here,” Nyoro said.
“These kinds of roadside declarations are what we need to bring to an end.”
His comments triggered one of the most dramatic moments of the debate.
Nyoro alleged that public participants who backed certain proposals, including a controversial 15 per cent tax on second-hand clothes, had been ‘manufactured’ by the Finance Committee.
The accusation drew an immediate objection from committee chairman Kimani.
“The member for Kiharu must withdraw the statement he has made. He is saying that the public participants who came to the Finance Committee were manufactured people. We have tabled here the submissions of over 100,000 people across the country. I have no capacity to manufacture 100,000 people,” Kimani retorted.
Majority Leader Kimani Ichung’wah also stepped in, accusing critics of misleading the public.
“I know people want to shout and mislead Kenyans, but we also have an obligation to set the record straight,” he said.
Ichung’wah clarified that proposals affecting PAYE for workers earning below Sh30,000 would be introduced separately and were not part of the Finance Bill currently before Parliament.
Another major divide involved proposals affecting second-hand clothing, commonly known as mitumba.
Opposition MPs argued that changes from zero-rating to tax exemption could ultimately raise consumer prices because traders would be unable to claim input VAT.
Bumula MP Wamboka Wanami warned that the measures would quietly increase the cost of living.
“My single biggest problem with this Bill is that it hides price increases inside technical tax language,” he said.
Embakasi West MP Mark Mwenje echoed the concerns, arguing that changes affecting second-hand clothes and rental housing would inevitably be passed on to consumers.
Supporters of the Bill, however, insisted those fears were misplaced.
Majority Whip Silvanus Osoro said claims that mitumba imports would attract additional taxes were false.
“There is nothing that calls for an increase in the percentage of taxes on mitumba imports,” Osoro said.
He also argued that proposed changes concerning non-resident landlords were intended to simplify tax compliance rather than introduce new taxes.
The debate highlighted broader concerns about Kenya’s economic situation and growing public frustration with taxation.
Homa Bay Town MP Peter Kaluma acknowledged that the Finance Committee had handled the Bill under difficult economic circumstances.
“This has been the most difficult Finance Bill to process because it is being done in a very constrained economic environment,” Kaluma said.
He noted that extensive public participation had informed the committee’s work and praised young Kenyans for actively contributing proposals.
The mention of youth involvement carried particular significance given the role played by Gen Z activists in mobilising the 2024 anti-tax protests.
The movement transformed the political landscape, demonstrated the power of digitally organised activism and forced the government to retreat on key tax proposals.
With remembrance activities planned and taxation tensions once again dominating public discourse, lawmakers repeatedly referred to the events of the previous year during the debate.
Kitui Central MP Makali Mulu warned colleagues to distinguish between the Executive’s original intentions and amendments proposed by Parliament.
Ugenya MP David Ochieng’ defended the Bill, arguing that much of the criticism was based on misinformation.
“This Bill is not just about increasing taxes; it is about making taxation easier,” Ochieng’ said.
Despite fierce opposition, the Finance Bill, 2026, cleared the Second Reading and proceeded with amendments incorporating recommendations from the Finance Committee.
After public participation across 13 counties, MPs dropped several contentious proposals, including a 25 per cent excise duty on mobile phones, the proposed activation tax, a planned increase in residential rental income tax from 7.5 to 10 per cent, and a controversial tax on mitumba imports.
The committee also retained zero-rated VAT status for locally assembled phones, electric mobility products, solar equipment and animal feed inputs to support local manufacturing.
It further proposed a review of PAYE bands that could exempt workers earning Sh30,000 and below from income tax, rejected expanded KRA enforcement powers during tax appeals, and endorsed a fresh tax amnesty programme to boost compliance and revenue collection.