Ruto Assents Finance Bill 2026 into Law Amid New Tax Reforms Opposition

President William Ruto on June 23, 2026 signed the Finance Bill 2026 into law at State House after approval by Parliament. The enactment establishes new fiscal measures while retaining several previously debated provisions and clarifying that key sectors such as freehold land, second-hand clothing (mitumba), rental income framework, and mobile money services are not newly taxed as earlier speculated.

The Finance Act introduces VAT changes including exemption of bottled water, dialyzers, scrap metal, PPP projects, and aircraft parts, while limiting VAT on mitumba to importation only and raising baggage duty-free thresholds to USD 2,000. Excise reforms include a 25% single-rate tax on mobile phones at activation, higher excise on sugar-sweetened beverages, reduced duty on extra neutral alcohol, and a 10% levy on plastic articles. Income tax measures include a 20% withholding tax on lottery winnings, 1.5% tax on scrap metal payments, reduced corporate tax for non-resident petroleum contractors, clarified repatriated income tax rules, and streamlined rental income taxation for non-residents, alongside customs duties protecting local textile and agricultural industries through higher import tariffs and selective duty remissions.

You can read full budget statement here: https://www.treasury.go.ke/sites/default/files/Latest%20updates/Budget_Statement_FY_2026-27_compressed.pdf