President William Ruto has formally signed the Finance Bill 2025 into law, just days after its approval by the National Assembly. The signing ceremony, held quietly at State House Nairobi on Thursday, brought together senior leaders from both sides of Parliament.
This development comes on the heels of renewed protests led by Gen Z activists, who flooded the streets of Nairobi in a powerful show of dissent. The demonstrations echoing the mass unrest that led to the rejection of the 2024 Finance Bill highlighted deep public anxiety over the government’s fiscal direction. Unlike last year, however, Ruto has moved ahead with the new legislation despite growing criticism.
The Finance Bill 2025 sets out major reforms to Kenya’s tax and revenue systems. It introduces amendments to several key statutes, including the Income Tax Act, Value Added Tax Act, and the Excise Duty Act, among others. One of the most impactful changes is the repeal of provisions that previously subjected retirement gratuities to taxation. This move means that retirees will no longer see deductions on their lump-sum payments, offering long-awaited relief for those exiting the workforce.
Another notable shift involves the expansion of mortgage tax relief. Kenyans will no longer be required to purchase a house through conventional mortgage channels to qualify. Whether building through SACCOs or financing via personal loans, citizens will now automatically be eligible for the same tax benefits, marking a more inclusive approach to housing incentives.
The law also maintains the current PAYE tax bands, after lawmakers pushed back against proposed new brackets. In a further win for privacy advocates, Parliament rejected amendments that would have given the Kenya Revenue Authority greater access to personal data. Meanwhile, essential goods will benefit from expanded zero-rated tax measures, and targeted corporate tax incentives are expected to drive investment in priority sectors.
Alongside the Finance Bill, President Ruto also signed the Appropriations Bill 2025 into law, granting the National Treasury authority to withdraw Ksh1.88 trillion from the Consolidated Fund. These funds will finance government operations and public services for the financial year ending June 30, 2026.
As both pieces of legislation take effect, the country now watches closely to see how their implementation will impact livelihoods, economic recovery, and the growing call for inclusive governance.
