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ICPAK Urges MPs to Balance Fiscal Stability and Growth as Finance Bill Review Intensifies

Kipkemboi Collins
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ICPAK Urges MPs to Balance Fiscal Stability and Growth as Finance Bill Review Intensifies

The Institute of Certified Public Accountants of Kenya (ICPAK), has urged the National Assembly to strike a balance between short-term fiscal stabilization and long-term economic growth during its review of the Finance Bill 2026.

Appearing before the Departmental Committee on Finance and National Planning in the National Assembly, the accountants’ lobby warned that while the Bill contains fewer tax increases, several proposals could undermine Kenya’s digital economy and manufacturing competitiveness.

Concerns Over Digital Economy Tax Proposals
Key among ICPAK’s concerns is the proposal to expand the definition of management or professional fees to include transaction-related charges such as card interchange and merchant service fees.

The body warned that imposing withholding tax on card payments would raise transaction costs and discourage electronic payments, undermining the government’s push for a cashless economy and financial inclusion.

ICPAK also rejected proposals to tax software distribution, arguing that such measures would increase costs for innovation and digital infrastructure, contrary to international tax standards under the OECD framework.

ICPAK Urges MPs to Balance Fiscal Stability and Growth as Finance Bill Review Intensifies
ICPAK Urges MPs to Balance Fiscal Stability and Growth as Finance Bill Review Intensifies
Manufacturing Sector Competitiveness and Tax Relief Proposals
ICPAK noted that Kenya’s manufacturing sector contributes 7.1 per cent of GDP and 11.7 per cent of formal employment, but uneven growth patterns highlight structural weaknesses in key industries.

They proposed tax reliefs, including lower import duties and a reduction of the Import Declaration Fee and Railway Development Levy to 1.5 per cent on industrial inputs to reduce production costs.

However, Committee members cautioned that past incentives had been abused by traders misdeclaring finished goods as raw materials, calling for tighter enforcement and monitoring.

Kuria Kimani, Chairperson of the Committee, said all submissions would be carefully considered to ensure the Bill achieves a balance between revenue needs and economic growth.

Kenya’s fiscal position remains under pressure, with public debt rising 11.7 per cent to KSh 11.8 trillion, equivalent to 67.8 per cent of GDP, according to the National Treasury, International Monetary Fund, and Kenya National Bureau of Statistics data.

ICPAK further noted that while Kenya’s tax-to-GDP ratio is projected at 13.7 per cent, it remains below the IMF estimate of 25 per cent potential, indicating significant fiscal space constraints.

The Kenya Revenue Authority surpassed KSh 2 trillion in the third quarter, supported by digital tax systems and enhanced compliance measures.

ICPAK called for improved public participation tracking and greater transparency in stakeholder views incorporated budget.

 

KEWOPA, IPF Warn Unpredictable Tax Changes Are Undermining Investor Confidence

Kipkemboi Collins
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KEWOPA, IPF Warn Unpredictable Tax Changes Are Undermining Investor Confidence

KEWOPA and the Institute of Public Finance (IPF) have raised concerns over Kenya’s unpredictable tax framework, warning that frequent policy changes are undermining investor confidence and long-term business planning.

In a joint submission to the Departmental Committee on Finance and National Planning on the Finance Bill 2026, the organisations said tax predictability, certainty, and stability are essential for a fair and investment-friendly system.


Policy Instability Raising Economic Concerns
KEWOPA and IPF said Kenya’s fiscal environment is now defined by frequent amendments and reversals of tax measures, often shortly after enactment.

They noted that the Finance Bill 2026 is the fourth under the current administration, yet core concerns around consistency remain unresolved.

The organisations stressed that global best practice shows stable tax systems drive growth and investment more effectively than repeated introduction of incentives and short-term fiscal adjustments.

KEWOPA, IPF Warn Unpredictable Tax Changes Are Undermining Investor Confidence
KEWOPA, IPF Warn Unpredictable Tax Changes Are Undermining Investor Confidence

Reversals and Sector Uncertainty Highlighted
The two institutions cited the proposed extension of bad debt relief from two to three years, reversing a 2025 reform, as well as the reinstatement of weekends and public holidays in tax objection timelines, reversing earlier exclusions.

They also flagged repeated VAT adjustments affecting electric mobility and clean cooking technologies, warning that such shifts undermine green investment and climate commitments.

In addition, they pointed to inconsistent implementation of the Medium-Term Revenue Strategy and National Tax Policy as a continuing source of policy incoherence.

LSK Flags Legal and Drafting Concerns

In a separate submission, the Law Society of Kenya (LSK) said while parts of the Finance Bill 2026 modernize tax administration, several provisions raise concerns on taxpayer rights, legal certainty, and competitiveness.

It cited a pattern of previously rejected proposals being reintroduced, including changes to appeal timelines and expansion of agency notice powers, saying this undermines legislative integrity and public trust. LSK also flagged drafting gaps and weak regulatory backing that could hinder implementation.

It criticised proposals requiring mandatory cash distributions regardless of liquidity, but welcomed measures removing double taxation on trust income, reducing the road maintenance levy, and abolishing excise duty on bottled water.

KEWOPA and IPF urged alignment with the Medium-Term Revenue Strategy and National Tax Policy, calling for consistent application of long-term frameworks.

They said this would strengthen compliance, boost investor confidence, and support growth, recommending a more predictable and transparent tax regime.

 

Ruto Directs NTSA to Retain Matatu Graffiti

Kipkemboi Collins
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Ruto Directs NTSA to Retain Matatu Graffiti

President William Ruto has directed the National Transport and Safety Authority (NTSA) to create an enabling environment that allows matatu operators to continue using graffiti and artwork on their vehicles, while ensuring safety standards and respect for other road users are maintained.

The move comes amid rising tension in the public transport sector over claims that operators had been instructed to remove all graffiti from their matatus.

Recognizing the matatu industry as both an economic pillar and a cultural space, the President emphasized that creative expression should not be treated as a liability.

“The industry is telling me that they have been told they must remove all graffiti from their matatus. And I’m asking myself why,” he stated, signaling concern over blanket enforcement measures that could undermine the sector’s identity and livelihoods.

Ruto Directs NTSA to Retain Matatu Graffiti
Ruto Directs NTSA to Retain Matatu Graffiti
Transport Sector Reform and Stakeholder Engagement
The directive places NTSA at the centre of a renewed consultation process with matatu SACCOs, artists, and transport stakeholders to develop practical and sustainable solutions.

The government’s position, according to the President, is to avoid policies that disrupt economic activity or erase the artistic identity that has long defined Kenya’s public transport system.

The matatu graffiti culture has evolved into a recognised form of urban expression, blending music, politics, and youth identity into mobile canvases that move millions daily.

However, concerns have been raised in regulatory circles over visibility, distraction, and road safety compliance, prompting calls for tighter controls.

President Ruto underscored the need for balance, stating that regulation should not stifle creativity. He added that the government will continue engaging stakeholders across the transport sector to ensure that both safety and economic livelihoods are protected.

Ruto Directs NTSA to Retain Matatu Graffiti
Ruto Directs NTSA to Retain Matatu Graffiti


Call for Calm and National Unity
At the same time, the President called on Kenyans to remain calm and avoid misinformation amid ongoing debates in the transport sector.

He urged citizens to reject division, fear, and violence, warning that instability undermines both livelihoods and the broader economy.

“While every citizen has a right to express their concerns, collectively we must reject hooliganism and all forms of violence that lead to the loss of lives, property, disrupting livelihoods and undermining our economy,” he said.

He further appealed for responsible conduct among road users and transport operators, encouraging cooperation and unity as the country navigates regulatory reforms.

The directive sets the stage for a more structured framework on matatu branding, aiming to preserve Kenya’s vibrant transport art culture while reinforcing safety and order on the roads.

 

Government Lowers Fuel VAT to 8pc as Kenya Battles Rising Global Oil Prices

Kipkemboi Collins
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Government Lowers Fuel VAT to 8pc as Kenya Battles Rising Global Oil Prices

The government has defended its decision to reduce Value Added Tax (VAT) on petroleum products from 16 percent to 8 percent, saying the move is aimed at easing pressure on households and businesses grappling with rising fuel prices.

President William Ruto said the government has foregone KSh 14.4 billion in tax revenue as part of broader interventions meant to cushion Kenyans from the effects of the global oil crisis.

The remarks come amid continued increases in fuel prices driven by rising global crude oil costs. Kenya imports all its petroleum products from the Gulf region, making the local market highly exposed to international price fluctuations.

Government Prioritises Fuel Stability and Consumer Protection
According to the President, the government’s response has focused on two key priorities: ensuring a stable fuel supply across the country and protecting consumers from the full impact of rising global oil prices.

 

“The current fuel prices reflect the global reality,” President Ruto said, noting that the increases are affecting transport costs, food production, business operations, and the overall cost of living.

He acknowledged the strain the rising prices are placing on ordinary Kenyans, saying fuel costs are directly affecting daily livelihoods.

President Ruto pointed to higher matatu fares, increased transport costs for farmers, reduced earnings for boda boda riders, and mounting pressure on household budgets and businesses.

“I know that for many Kenyans, rising fuel prices are not just numbers at the pump. They reflect everyday life,” Ruto said.

Government Lowers Fuel VAT to 8pc as Kenya Battles Rising Global Oil Prices
Government Lowers Fuel VAT to 8pc as Kenya Battles Rising Global Oil Prices

Fuel Subsidy Measures Intensified
To cushion consumers, the government has tapped into the Petroleum Development Fund to stabilise fuel prices over recent months.

In the last two pricing cycles alone covering the April-May and May-June 2026 periods the government utilised KSh 13.7 billion to cushion consumers from sharp increases in global oil prices.

President Ruto said the government had earlier undertaken forward planning through the Petroleum Development Levy and Fund, allowing it to build strategic financial reserves capable of stabilising the market during periods of volatility.

 

 

Middle East Conflict Behind Kenya Fuel Price Surge, Ruto Says

Kipkemboi Collins
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Middle East Conflict Behind Kenya Fuel Price Surge, Ruto Says

President William Ruto has defended the sharp rise in fuel prices in Kenya, saying the country is suffering the effects of a global energy crisis triggered by the escalating conflict in the Middle East.

In a national address, the President acknowledged the growing frustration among Kenyans over the increasing cost of living and rising fuel prices, which have placed pressure on households and businesses across the country.

“I fully understand the frustration and the burden this has placed on households and on the cost of living across the country,” he said.

Ruto said the current situation is not unique to Kenya, noting that countries across Africa, Europe, Asia and the Americas are also struggling with fuel shortages, supply disruptions and soaring prices.

Global Supply Shock Pushes Prices Higher
According to the President, the crisis intensified after the conflict involving Iran escalated on February 28, 2026, disrupting operations around the Strait of Hormuz one of the world’s most critical oil transit routes.

Nearly 20% of global oil supply passes through the route every day, making the disruption one of the biggest oil supply shocks in recent history.

Within weeks, global fuel prices surged sharply. Super petrol prices rose by 54%, diesel by 118%, and kerosene by 126.4%.

These increases have directly affected the landed cost of fuel imported into Kenya, eventually pushing up pump prices nationwide.

Middle East Conflict Behind Kenya Fuel Price Surge, Ruto Says
Middle East Conflict Behind Kenya Fuel Price Surge, Ruto Says

The President warned that the global energy market remains unstable, citing projections from international agencies that suggest the crisis may continue for several months.

The World Bank now projects global energy prices will rise by 24% in 2026 alone, while the International Energy Agency has warned that oil markets could remain under-supplied until late 2026 or beyond.

Governments Worldwide Introduce Emergency Measures
Ruto emphasised that governments around the world are already taking emergency steps to manage the crisis and reduce fuel consumption.

Some countries, he noted, are experiencing actual fuel shortages and rationing, while others have introduced work-from-home arrangements and reduced working days to cut fuel demand.

“Fellow citizens, this is not a Kenyan problem alone,” the President said.

 

 

Ruto: The Life of Rachel Wandeto Will Not Go Unanswered

Kipkemboi Collins
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Ruto: The Life of Rachel Wandeto Will Not Go Unanswered

President William Ruto has strongly condemned what he termed as ethnic incitement and hate in the country, linking it to the killing of gospel artist Rachel Wandeto.

Speaking while on a tour of the Coast region, the Head of State warned political actors against using ethnicity and division to advance agendas, saying such actions would not be tolerated and would be accounted for in future.

Rachel Wandeto, a gospel artist, succumbed to severe injuries sustained during a brutal attack on May 16, 2026, in Mwiki, Kasarani, Nairobi.

Preliminary investigations indicate that she was walking home when she encountered three
men along 11th Street near Obama Road.

The assailants are reported to have doused her with a flammable liquid, and set her on fire before fleeing the scene.

She was rushed for treatment at Kenyatta National Hospital but later died from the extent of her injuries, prompting widespread condemnation and calls for swift justice from both the public and leaders.

Ruto: The Life of Rachel Wandeto Will Not Go Unanswered
Ruto: The Life of Rachel Wandeto Will Not Go Unanswered
Ruto’s Warning on Ethnic Incitement
President Ruto, while addressing residents at the Coast, linked the tragedy to what he described as organized ethnic incitement, warning that perpetrators of hate would be held accountable.

He said those without a coherent national vision would not be allowed to divide the country along tribal lines.

“Without fear of contradiction, those with no vision for our nation, no agenda, and no plan, will not divide our nation using ethnicity or hate.” He warned that those propagating tribal animosity would answer for it.

“The Life of Rachel Wandeto, will not go unanswered!” President Ruto added.

Call for National Unity
The President rejected political intimidation, ethnic profiling stating that no Kenyan should be branded a traitor for differing views.

He emphasized unity, saying Kenya would not be “blackmailed using ethnicity or hate,” and reiterated that Kenyans would not be divided through tribal narratives. He called for cohesion and insisted the country would continue moving forward as one nation.

“Hatuwezi kukubali, kuwaruhusu mutuuzie ukabila, chuki, blackmail, we are telling you, we will not allow you to blackmail anybody in Kenya!” Ruto added.

 US Extends AGOA Trade Benefits Through 2026, Reinstates Gabon

Kipkemboi Collins
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 US Extends AGOA Trade Benefits Through 2026, Reinstates Gabon

US President Donald Trump has issued a new proclamation extending key African Growth and Opportunity Act (AGOA) trade preferences through December 31, 2026, preserving duty-free access for eligible sub-Saharan African countries and sustaining long-running commercial ties between the United States and Africa.


The proclamation confirms that duty-free treatment under AGOA remains in force through 2026, alongside extensions of the regional apparel article program and the third-country fabric program, both critical to textile exporters.


Under the new determination, Gabon has been redesignated as an AGOA beneficiary sub-Saharan African country after demonstrating progress in meeting eligibility requirements under U.S. trade law, reversing its earlier suspension.


Haiti and CBERA Adjustments
Separately, the proclamation extends preferential treatment for Haiti under the Caribbean Basin Economic Recovery Act, including the Haiti Economic Lift Program, while maintaining duty-free access and adjusting apparel import limits through December 31, 2026.


The proclamation directs modifications to the Harmonized Tariff Schedule of the United States and authorizes federal agencies, including the United States Trade Representative, Customs and Border Protection, and the International Trade Commission, to implement necessary updates and publish technical corrections in the Federal Register.


The update ensures continuity of U.S. trade preference programs, superseding inconsistent prior provisions and reinforcing legal stability for exporters and import-dependent industries across Africa and the Caribbean.

 US Extends AGOA Trade Benefits Through 2026, Reinstates Gabon
US Extends AGOA Trade Benefits Through 2026, Reinstates Gabon


The inclusion of Gabon as a reinstated beneficiary signals a policy shift toward conditional engagement based on governance and compliance benchmarks set under U.S. trade legislation.

Weathering ongoing global trade realignments, the updated provisions for Haiti under CBERA aim to stabilize export-oriented manufacturing while maintaining safeguards on apparel import volumes into the U.S. market.

Overall, the proclamation underscores a broader U.S. strategy of using targeted trade preferences to strengthen economic partnerships, promote regional development, and maintain structured market access frameworks that balance development goals with domestic trade policy priorities through coordinated interagency implementation.

 

State Department Appeals for KSh 19.3 Billion Emergency Relief as Drought Crisis Deepens

Kipkemboi Collins
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State Department Appeals for KSh 19.3 Billion Emergency Relief as Drought Crisis Deepens

The State Department for Special Programmes (SDSP) has appealed for an additional KSh 19.3 billion in emergency funding to avert a worsening humanitarian crisis as drought conditions intensify across Kenya.

Appearing before the Departmental Committee on Regional Development chaired by Peter Lochakapong at Parliament, PS Ismail Maalim Madey warned that current allocations are insufficient to meet rising humanitarian needs driven by climate shocks.


Inadequate Emergency Relief Funding
Madey noted that the department has only been allocated KSh 162.8 million for emergency food assistance in FY 2026/27, a figure he termed inadequate compared to escalating demand.

He said the government had earlier invoked Article 223 of the Constitution to approve KSh 12.65 billion in emergency spending during the current financial year, underscoring the scale of the crisis.

The PS said Parliament is being asked to consider KSh 14 billion within the printed estimates for relief operations, alongside KSh 5 billion to operationalise and maintain the Strategic Food Reserve, which currently lacks funding despite its importance in cushioning vulnerable populations during shortages.


Operational and Staffing Constraints
He further raised concerns over institutional weaknesses, noting that SDSP is operating with only nine technical officers against an approved establishment of 62, while also seeking KSh 317 million to decongest overcrowded offices in compliance with occupational safety regulations.

Madey also flagged governance challenges in the National Drought Emergency Fund (NDEF), stating that although it is domiciled under the State Department for Special Programmes, it is administered by the National Drought Management Authority (NDMA), limiting oversight.

He added that development allocations had been reduced significantly, creating a funding shortfall that hampers programme delivery.

Despite constraints, the department reported a 99 per cent budget absorption rate and confirmed settlement of KSh 1.1 billion in pending bills.

State Department Appeals for KSh 19.3 Billion Emergency Relief as Drought Crisis Deepens
State Department Appeals for KSh 19.3 Billion Emergency Relief as Drought Crisis Deepens
Committee Deliberations and Policy Concerns
Committee members, including Gathoni Wamuchomba, Julius Mawathe, and Alio Maalim Hassan, urged increased funding, improved coordination with the Interior Ministry, and stronger safeguards against politicisation of relief distribution.

As Parliament deliberates on the budget estimates, the decision on the KSh 19.3 billion request is expected to shape Kenya’s disaster preparedness and food security response amid recurring droughts.

The Departmental Committee is expected to finalise its report before submitting it to the Budget and Appropriations Committee, which will table recommendations in the National Assembly for debate and approval, a process that will determine the scale of funding for Kenya’s drought response operations going.

 

KQ Warns Strategic Goods Bill Could Disrupt Flights, Trigger Delays and Cancellations

Kipkemboi Collins
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KQ Warns Strategic Goods Bill Could Disrupt Flights, Trigger Delays and Cancellations

Kenya Airways has warned that the proposed Strategic Goods Control Bill, 2026 could significantly disrupt flight operations if civil aviation parts and services are not exempted from additional regulatory clearance requirements.

Kenya Airway, appearing before the National Assembly Departmental Committee on Administration and Internal Security chaired by Narok West MP Gabriel Tongoyo, said the Bill could slow down importation of critical aircraft spare parts needed to maintain operational reliability.

KQ Secretary and Director of Legal Services Habil Waswani told lawmakers that aviation equipment is already strictly certified under international safety regimes including ICAO, FAA and EASA standards.

Habil Waswani argued that introducing another layer of approval under the Bill would duplicate existing oversight mechanisms and create inefficiencies for airlines already operating under tight turnaround schedules.

He warned that delays in clearing essential parts could directly affect flight reliability, particularly for Kenya Airways’ relatively small fleet of about 34 aircraft.

KQ Warns Strategic Goods Bill Could Disrupt Flights, Trigger Delays and Cancellations
KQ Warns Strategic Goods Bill Could Disrupt Flights, Trigger Delays and Cancellations
Operational Disruptions and Aircraft Downgrades
For instance, he cited a recent incident involving a Boeing 787 Dreamliner that developed a technical fault before a scheduled flight to Dubai, forcing the airline to downgrade passengers to a smaller aircraft.

The airline added that spare parts often arrive overnight on inbound international flights and require immediate customs clearance to avoid operational disruptions.

KQ warned that introducing additional bureaucratic layers without fast-track provisions for aviation components could undermine competitiveness against major global carriers such as Emirates and Ethiopian Airlines.

The carrier proposed a pre-clearance framework for airline-specific parts and equipment to speed up approvals while maintaining security oversight.

Waswani said civil aviation components present minimal national security risk due to strict international certification and monitoring systems.

Kenya Airways maintains that any new legislation affecting aviation logistics should be aligned with ICAO standards and global best practices to avoid unintended consequences on safety, reliability and competitiveness.

Lawmakers are expected to incorporate industry feedback before finalising the report, which will determine whether aviation-specific exemptions are introduced into the final version of the Strategic Goods Control Bill 2026.

Finance Committee to Begin Stakeholder Engagements on Finance Bill 2026

Kipkemboi Collins
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Finance Committee to Begin Stakeholder Engagements on Finance Bill 2026

The Departmental Committee on Finance and National Planning will begin stakeholder engagements on the Finance Bill 2026 today, with sessions scheduled to run through Friday May 29, 2026.

The exercise is aimed at collecting public views on the proposed legislation before the Committee compiles and submits its final report for consideration in the National Assembly.

The Finance Bill 2026, has been introduced as a key policy instrument to enhance revenue mobilisation and strengthen tax administration.

It is projected to generate approximately KSh 117 billion in additional revenue through proposed tax measures across multiple sectors of the economy.


Legal Amendments and Tax Reforms
It seeks to amend several key statutes including the Income Tax Act, Value Added Tax Act, Excise Duty Act, Tax Procedures Act, Miscellaneous Fees and Levies Act, and the Stamp Duty Act.

The reforms are designed to simplify compliance, improve clarity in tax administration, and remove outdated provisions and redundant legal references.

Finance Committee to Begin Stakeholder Engagements on Finance Bill 2026
Finance Committee to Begin Stakeholder Engagements on Finance Bill 2026

Members of the public who wish to participate are encouraged to submit their views through the provided Quick Response (QR) Code by the Finance Committee, where they can comment on individual clauses of the Bill.

The engagement period will allow stakeholders to contribute input that may shape final amendments before the Bill is enacted.

The Bill is part of ongoing fiscal reforms aimed at broadening the tax base while improving efficiency in revenue collection.

Stakeholder Engagement and Policy Review
The stakeholder engagement process is expected to play a critical role in shaping the final version of the Finance Bill 2026, by incorporating public input and sector-specific concerns.

Such consultations are key to enhancing transparency, strengthening public trust in fiscal policy, and ensuring that the resulting legislation reflects a balance between revenue generation and economic growth priorities.

The Committee is expected to review submissions received during the engagement period before finalising its recommendations for debate in Parliament.

 

 

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