Aasai

The Finance Bill 2025, described by Government Spokesperson Isaac Mwaura as a “game changer,” promises wide-reaching benefits for Kenyans from all walks of life. Speaking amidst widespread misinformation online, Mwaura criticized a recent BBC documentary for portraying a skewed version of events and accused detractors of inciting unrest. He emphasized that the new bill is focused on easing the tax burden for workers, eliminating fraud, and fostering national development.

One of the bill’s major reforms is the automatic application of tax reliefs such as Housing Levy and mortgage deductions before PAYE is calculated. This will reduce employee taxation and eliminate the long wait for KRA refunds. Retirees will also benefit, as pensions—both lump sum and monthly—will now be tax-exempt, boosting their income and independence. Small businesses stand to gain from simplified accounting, allowing them to deduct equipment costs immediately.

To tackle fraud, the bill proposes modernizing KRA’s investigative tools using AI and data analytics, while also tightening tax refund processes. Mwaura noted that companies exploiting loopholes, especially in sectors like bread manufacturing, have cost the country billions. Now, refund abuse will attract stricter penalties, and Treasurys power to grant tax waivers will be limited to curb corruption and patronage.

The bill also supports the digital economy by scrapping the digital service tax, cutting crypto tax rates, and simplifying compliance for fintech start-ups. Per diem allowances have been raised and made tax-free to benefit private sector workers, while the aviation industry is set to gain from tax exemptions on spare parts. “Rather than introduce new taxes,” Mwaura said, “the bill targets fairness and accountability—ensuring everyone pays their fair share for a better Kenya.”