President William Ruto has officially signed the Finance Bill 2025 into law, just days after it was passed by the National Assembly.

In a brief ceremony held at State House, Nairobi, on Thursday, the President gave his final assent to the bill in the presence of senior parliamentary leaders from both the Majority and Minority sides.

The signing comes against the backdrop of Gen Z-led commemorative protests that brought parts of Nairobi to a standstill, echoing last year’s unrest over the 2024 Finance Bill, which Ruto was ultimately forced to reject following intense public pressure.

The Finance Bill outlines fiscal interventions aimed at improving the business environment and strengthening the tax regime.

Treasury CS John Mbadi reading the 2025/2026 Budget before the National Assembly on June 12, 2025.

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National Assembly

The Bill proposes amendments to the Income Tax Act, Value Added Tax Act, Tax Procedures Act, Miscellaneous Fees and Levies Act, Stamp Duty Act, and the Excise Duty Act.

It further seeks to repeal subsections (4) to (9A) of Section 8 of the Income Tax Act, which currently govern the tax treatment of pensions and retirement benefits under both private schemes and the National Social Security Fund (NSSF). This means that there will be no more tax deductions on gratuity upon retirement.

The Bill also promises tax relief whereby one would no longer need to buy a house to get mortgage tax relief, even if you build through a SACCO or a personal loan, Kenyans will qualify automatically.

Other provisions include no introduction of new PAYE tax bands, restrictions on the taxman’s ability to access one’s data after MPs rejected an earlier amendment recommendation, zero-rated tax reforms on essential commodities, and corporate tax breaks for key sectors. 

In addition, President Ruto signed the Appropriations Bill 2025 into law, granting legal authority for the government to access funds for the upcoming financial year.

The legislation will allow the National Treasury to withdraw Ksh1.88 trillion from the Consolidated Fund to finance government operations and services for the year ending June 30, 2026.

The law also empowers Ministries, Departments, and Agencies (MDAs) to utilise Ksh671.99 billion as Appropriation-in-Aid (AIA), representing revenues they collect internally. These allocations, approved by Parliament, are expected to support the implementation of key government programmes and projects across various sectors.

Furthermore, the Bill provides the legal framework for the utilisation of the approved Estimates of Revenue and Expenditure for the 2025/2026 financial year. The Estimates comprise an allocation of Ksh1,805.02 billion for recurrent expenditure and Ksh744.52 billion for development expenditure.

An aerial view of the National Assembly chambers during budget reading on June 12, 2025.

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National Assembly