President William Ruto has officially signed the 2025 Finance Bill into law, setting into motion Kenya’s KSh 4.2 trillion budget for the 2025/26 financial year. The signing took place at State House, Nairobi, on Thursday morning, just days after Parliament passed the bill following intense public scrutiny and debate.
Ruto’s assent comes after lawmakers scrapped several contentious tax clauses, including the proposal to grant the Kenya Revenue Authority unrestricted access to personal bank accounts. This move followed widespread criticism from civil society, business leaders, and ordinary citizens who viewed the clause as a violation of privacy rights.
Speaking during the signing ceremony, President Ruto emphasized the importance of public engagement. “We have listened to Kenyans, and this law reflects a delicate balance between revenue generation and citizen well-being,” he said. He described the bill as a tool for fiscal sustainability, business growth, and a fairer tax regime.
The new Finance Act aims to raise an additional KSh 30 billion primarily through improved tax compliance and a broader tax base, rather than through new levies. In line with this objective, the government has maintained the current Pay-As-You-Earn (PAYE) bands and excluded several essential commodities from taxation.
Notably, lawmakers zero-rated bread, sanitary pads, and infant formula to cushion households from the high cost of living. This approach contrasts sharply with the 2024 Finance Bill, which triggered deadly protests across the country and was ultimately withdrawn.
Alongside the Finance Bill, Ruto also signed the Appropriation Bill into law. This legislation permits the National Treasury to spend KSh 1.88 trillion from the Consolidated Fund and allows state agencies to utilize KSh 672 billion in internally generated revenue.
Treasury Cabinet Secretary John Mbadi praised the law, stating that it closes loopholes and streamlines tax administration. He also highlighted new provisions such as extending mortgage relief to homes built through SACCOs or personal financing. “This bill removes complexities that hinder compliance and encourages investment in manufacturing, agriculture, and technology,” Mbadi explained.
International observers, including the IMF and World Bank, are also closely monitoring Kenya’s fiscal direction. The Finance Act will play a crucial role in shaping economic recovery, investor confidence, and inflation control in the months ahead.
Looking forward, President Ruto is expected to prioritize the implementation phase. With several other key bills pending, including the Anti-Money Laundering Bill, his administration will be under pressure to demonstrate transparency and accountability.
The Finance Act 2025, thus, marks not just a legal milestone but a test of political leadership and economic management.
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