Former LSK President Faith Odhiambo has raised concerns over the proposed Finance Bill 2026, urging Parliament to thoroughly scrutinise the legislation before approving it.
In a detailed statement on Friday May 8, Odhiambo said every Kenyan deserves to understand what is contained in the Bill, which was published on April 30 and is now before Parliament. She noted that while the government’s plan to collect Ksh 3.63 trillion in revenue for the 2026/27 financial year and run a budget deficit of 5.3 percent of GDP is not unreasonable, the real issue lies in how the burden will be shared.
“The government targets Ksh 3.63 trillion in revenue for 2026/27 and a wider budget deficit of 5.3% of GDP. These are not unreasonable fiscal objectives but the manner in which the burden of achieving them is distributed is a cause for serious concern,” she said.
Ms Odhiambo criticised proposals to move income tax return deadlines from June 30 to April 30, saying the shorter timelines would hurt businesses and traders. She argued that reducing nil return filing timelines to January 31 would create additional compliance pressure, especially for small enterprises.
On second-hand clothes traders, commonly known as mitumba dealers, she opposed a proposal requiring a 5 percent tax on customs value before goods are released.
“A trader importing a bale worth Ksh1 million pays Ksh 50,000 regardless of whether they make a profit or a loss. I cannot in good conscience describe this as equitable,” she stated.
The advocate of the High Court also faulted plans to increase residential rental income tax from 7.5 percent to 10 percent, warning that without proper enforcement, higher rates would only fuel tax evasion.
Odhiambo further objected to the removal of VAT exemptions on money transfers and payment processing services, saying such charges would make financial services more expensive for ordinary Kenyans.
“A phone is not a luxury. It is how Kenyans bank, communicate, conduct business and access government services. Parliament must interrogate this carefully,” she said while criticising the proposed 25 percent excise duty on mobile phones.
However, she acknowledged several positive measures in the Bill, including reduced corporate tax for non-resident firms, extension of tax amnesty provisions, and VAT exemptions on electric buses, bicycles and dialysis equipment.
She concluded by warning lawmakers against blindly passing the Bill.
“We cannot afford a repeat of June 2024. Parliament must discharge its oversight role with the seriousness this moment demands,” Odhiambo said.