Every year, the Finance Bill comes around, and for many of us, it feels like it’s written in a language only lawyers, accountants and economists can understand. But behind the big words and legal jargon are real changes that affect our pockets—how much we pay in taxes, how businesses operate, and even how easy or hard it is to get a job.

As Kenya’s Parliament reviews the Finance Bill 2025, submissions are streaming in, providing crucial insights into how proposed tax measures are likely to impact the economy, businesses, and citizens, as well as how citizens propose that Parliament addresses the issues raised. This article examined random submissions to gauge Kenyans’ priorities for the Department Committee on Finance and National Planning. 

Grant Thornton, a global assurance, tax, and advisory firm, shared a memorandum that stands out for its sharp critique of tax administration inefficiencies and its call for a more coherent and consultative tax policy. One of its proposals involves improving PAYE for workers. If you’re employed, PAYE (Pay As You Earn) tax is deducted from your salary every month. Sometimes, the Kenya Revenue Authority (KRA) ends up owing people refunds because their employers didn’t apply all the right reliefs or deductions. That’s time wasted, and often money delayed. The Finance Bill aims to address this issue, and Grant Thornton agrees. They say this change could save employees from having to chase KRA for refunds. The burden will be on employers to get it right from the start.

In addition, their memorandum doesn’t shy away from highlighting the systemic issue of Kenya’s rapidly changing and increasingly complex tax framework. An issue that the National Tax Policy appears not to have tackled.  Frequent amendments, lack of clarity, and overlapping laws are deterrents to investment and compliance. For businesses, this translates into higher operational costs, increased risk exposure, and a need for ongoing legal and financial reassessment. Grant Thornton’s perspective aligns with that of many in the professional services sector who argue that revenue-generation goals must be balanced with stability, simplicity, and predictability in tax policy. While the Finance Bill aims to plug revenue gaps, questions linger over whether its provisions align with Kenya’s broader economic ambitions, such as promoting manufacturing, digitisation, and job creation. 

The Digital Financial Services Association of Kenya (DFSAK) also shared a memorandum, objecting to the continued issuance of agency notices by the Kenya Revenue Authority (KRA) even when tax disputes are under appeal. Currently, there is no clear legal prohibition preventing KRA from enforcing tax collections through agency notices while an appeal is pending before the Tax Appeals Tribunal or a court. DFSAK proposed inserting a new subsection into Section 42 of the Tax Procedures Act to explicitly prohibit the issuance of agency notices in such circumstances unless the Tribunal or court rules otherwise. They maintained that this is necessary to protect taxpayers’ constitutional right to a fair hearing and due process.

Data protection was also a matter of concern with DFSAK noting that the repeal of Section 59A(1B) of the Tax Procedures Act could lead to the unwarranted mandatory sharing of sensitive personal and commercial data through integrations with KRA systems. To address this, they recommended retaining the section and including a proviso that ensures the Data Protection Act, 2019, protects taxpayer data. DFSAK emphasises that any integration with KRA systems must not compromise data privacy rights and should incorporate appropriate safeguards.

Matters not covered in the Finance Bill were also raised. DFSAK addressed an issue not directly captured in the Finance Bill but identified in the draft Income Tax (Guidelines on Allowability of Bad Debts), 2024. Specifically, Paragraph 5 of the guidelines excludes bad debts of a capital nature from being allowable tax expenses. DFSAK notes that this provision is ambiguous, particularly for financial institutions and digital lenders, who may struggle to determine whether the principal portion of a non-performing loan qualifies as a deductible expense. They recommend that the guidelines explicitly allow both the principal and interest portions of a bad debt to be deductible for entities engaged in lending, provided the debt meets the stipulated conditions. This clarification would help avoid inconsistent interpretations and disputes with tax authorities.

The Kenya Sugar Manufacturers Association (KESMA) also submitted a proposal to maintain zero-rated VAT status for Sugar Cane Transport as opposed to the exempt status proposed by the bill. They argue that the increase would result in the cost being transferred to farmers and eventually discourage small-scale sugarcane farming. 

What is clear is that Parliament’s Finance Committee must deal with proposals from various sectors and cannot resolve all the problems within Kenya’s financial system. This annual, piecemeal attempt to rectify the shortcomings of Kenya’s tax system and legislation often yields reactive, short-term solutions rather than comprehensive reforms, leaving structural inefficiencies, ambiguity, and enforcement challenges largely unaddressed.