The National Assembly has invited members of the public and stakeholders to submit memoranda on the Finance Bill which is currently under consideration by the Departmental Committee on Finance and National Planning.
In line with Article 118 of the Constitution and Standing Order 127, Parliament is required to facilitate public participation in legislative processes. The Clerk of the National Assembly has therefore formally opened submissions ahead of committee deliberations.
Expanded Definition of Royalties and Digital Taxation
Among the key proposals, the Bill seeks to redefine “royalty” under the Income Tax Act to include payments related to digital platforms, payment systems, card schemes, and software distribution arrangements. It also clarifies that non-resident rental income will be subject to a final tax rate of 30%.
In the digital economy space, the Bill introduces definitions for virtual assets and service providers, requiring compliance reporting and enabling automatic exchange of information with other jurisdictions.
It further empowers tax authorities to generate pre-populated tax returns based on available electronic data.
On VAT, the Bill proposes adjustments to input tax treatment where supplies are reclassified as exempt, and extends the period for claiming refunds on bad debts from two to three years. Hire purchase arrangements are also clarified as non-taxable supplies under specific conditions.
Exercise Duty and Consumption Tax Adjustments
Excise Duty changes include new rates on mobile phones at 25%, plastics at 10%, coal at 5%, and a significant increase in duties on tobacco products.
The Bill also revises tax treatment for winnings, gambling definitions, and gratuity payments under long-term contracts.
Additional reforms include reducing the Road Maintenance Levy from Ksh 3 to Ksh 1.50, exempting certain aircraft goods from levies, and adjusting Stamp Duty provisions to support Real Estate Investment Trusts (REITs).
Stakeholders are required to submit written memoranda indicating their names and contacts by Monday, 25 May 2026 at 5:00 p.m.
Submissions can be delivered to the Office of the Clerk, First Floor, Main Parliament Buildings, Nairobi.
