Setting the Record Straight: Government Defends Finance Bill 2026, Dismisses Claims of New Taxes on Basic Commodities

By Gedion Nzyoki -

• The Government has defended the Finance Bill 2026, stating that it is designed to ease the cost of living, support investment, and strengthen public services rather than impose new burdens on households.
• The Office of the Government Spokesperson dismissed circulating claims of new taxes on basic commodities and digital services, clarifying that the proposed reforms are aimed at streamlining and simplifying the existing tax framework.
• The Government also highlighted broader social protection measures and ongoing child welfare interventions, while urging public participation and caution against misinformation as the Bill proceeds through Parliament.

Nairobi, Kenya | May 27, 2026 — The Government of Kenya, through the Office of the Government Spokesperson, has defended the proposed Finance Bill 2026, insisting that the legislation is aimed at easing the cost of living, supporting businesses, and strengthening social protection, while dismissing widespread claims about new taxes on basic commodities and mobile phones.

Government Spokesperson Hon. Sen. (Dr.) Isaac Mwaura during a press briefing on Tuesday at the Harambee House Annex in Nairobi. Photo: Isaac Mwaura Maigua/Facebook.

Speaking during a press briefing on Tuesday, May 26, 2026, at the Government Spokesperson’s Media Centre at Harambee House Annex, Government Spokesperson Hon. Sen. (Dr.) Isaac Mwaura said the Bill seeks to create a fair, transparent, and sustainable tax system capable of funding essential public services such as healthcare, education, infrastructure, and security.

According to the government, the Finance Bill 2026 introduces a series of reforms designed to support households, encourage investment, and promote economic growth while protecting ordinary Kenyans from additional financial strain.

Among the key proposals highlighted in the Bill is continued support for affordable housing through tax relief on mortgage interest, as well as the exemption of property transfers into Real Estate Investment Trusts (REITs) from Capital Gains Tax.

The government says the move is intended to boost investment in housing and large-scale developments.

The Bill also proposes a full tax exemption on pension benefits paid to dependents after the death of a contributor, a move the government says will strengthen social protection and ensure families receive their full entitlements without deductions.

To lower the cost of essential goods and services, the government announced VAT exemptions on dialysis equipment, agricultural inputs, raw materials for animal feeds, and pharmaceutical manufacturing inputs.

“The Finance Bill 2026 introduces several progressive reforms designed to support households, businesses, and key sectors of the economy,” Mwaura stated.

The government further said the Bill supports green energy initiatives by exempting solar and lithium-ion batteries, electric buses and bicycles, as well as bioethanol cooking solutions from VAT. Officials argue that these measures will reduce transport and energy costs while helping Kenya meet its climate commitments.

In the agriculture sector, the transportation of sugarcane will also be VAT-exempt to help farmers increase their earnings.

The Bill additionally proposes increasing the duty-free allowance for returning residents from USD 300 (about KSh 40,000) to USD 2,000 (about KSh 260,000), allowing travellers to bring in more personal goods such as phones, laptops, and clothing without paying duty.

The government also announced an extension for businesses to file returns and settle taxes without penalties from June to December 2026 under a tax amnesty programme aimed at improving compliance.

Government Dismisses Claims of New Taxes on Phones, Bread, and Mitumba

At the same time, the Government Spokesperson used the opportunity to address concerns and misinformation circulating online regarding the Finance Bill.

He dismissed claims that the government intends to introduce new taxes on smartphones, bread, mitumba, and mobile money transactions.

According to Mwaura, smartphones currently attract multiple taxes, including VAT, import duty, IDF, RDL, and excise duty, amounting to about 55.5 percent. The proposed law, the government says, seeks to replace the multiple charges with a single 25 percent excise duty applied at activation.

“The Bill does not introduce a new tax on smartphones,” Mwaura clarified.

The government also denied reports suggesting that bread would attract VAT or that new taxes had been introduced on second-hand clothes commonly known as mitumba.

On the digital economy, the government clarified that no additional taxes have been introduced on digital content monetisation or mobile money transactions, saying the Bill only seeks to streamline taxation for digital platforms and payment systems.

Further, the government assured Kenyans that existing data protection laws remain in force and that the Bill does not grant tax authorities access to personal mobile money data.

Mwaura said the government appreciates the ongoing public participation process and pledged continued engagement with citizens as Parliament debates the Bill.

Meanwhile, the government also expressed concern over the increasing cases of child abductions and violence against children across the country.

According to data from the Child Protection Information Management System (CPIMS), Kenya recorded 10,581 child protection cases between January 2025 and March 2026. The cases included 6,820 abandonment cases, 1,952 abductions, 1,636 missing children cases, and 173 trafficking cases.

The government said it has intensified interventions, including rescue operations, family tracing, reunification programmes, and judicial action, to address the crisis.

Parents were urged to educate children against accepting gifts or lifts from strangers and to encourage them to walk in groups while travelling to and from school.

The government also called on the public to report cases of missing children, abuse, trafficking, and violence through the National Child Helpline 116, the WhatsApp reporting line 0722 116 116, police stations, and Children’s Offices across the country.