Kenya's President William Ruto has officially signed the Finance Bill 2025 into law, introducing sweeping fiscal reforms aimed at increasing revenue, managing public debt, and spurring economic productivity.
The signing ceremony, held at State House Nairobi, marks a critical phase in the Kenya Kwanza administration's efforts to consolidate its economic agenda ahead of the 2026 general elections.
The new law touches nearly every corner of the economy, from manufacturing and agriculture to digital services, energy, and financial markets.
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It includes adjustments to tax brackets, an expansion of VAT to cover more services, new environmental levies, and targeted tax incentives for export-oriented industries.
Officials say these reforms are necessary to address Kenya's high debt servicing obligations, expand the tax base, and reduce reliance on external borrowing.
"This Act is not just about raising revenue; it's about resetting our economic trajectory," President Ruto said during the signing, emphasizing that the government must "live within its means" while delivering development.
However, the Finance Act 2025 arrives under a cloud of deep public suspicion and fatigue from last year's experience with the Finance Act 2024, which triggered nationwide protests, often led by Gen Z demonstrators.
The 2024 law had introduced unpopular tax measures, including the Housing Levy and increased VAT on fuel and digital services--moves that sparked weeks of civil unrest, arrests, and multiple deaths during police crackdowns.
Those protests forced parts of the 2024 law to be suspended by the courts, and some provisions were later scrapped after public pressure.
The memory of those events still lingers, casting a long shadow over the current bill's rollout.
Though the government has promised greater transparency and consultation this time around, early signs of dissent have already emerged.
Civil society groups and opposition leaders have warned that the new tax measures could again disproportionately affect low-income earners and small businesses, worsening an already high cost of living.
"There's a sense of déjà vu. The people remember what happened last year, and they are watching closely," said economist Kwame Owino, CEO of the Institute of Economic Affairs.
Supporters of the bill argue that the reforms are more balanced and data-driven than last year's, noting that several contentious measures were dropped during the parliamentary debate phase.
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Pro-government legislators say the law is crucial to stabilizing Kenya's economy and reducing the budget deficit.
Implementation of the Finance Act 2025 begins immediately, with key ministries and the Kenya Revenue Authority (KRA) expected to roll out administrative guidelines in the coming days.
Treasury officials say the new policies are projected to raise an additional KSh 300 billion in revenue during the 2025/26 fiscal year.
Still, with the scars of 2024 unrest fresh in the public mind, the government now faces a delicate balancing act: meeting its fiscal targets without reigniting the anger that once brought the country to a standstill.
