7 groups of Kenyans who need to read Finance Bill 2025 [Budget Watch]

President William Ruto’s Cabinet has approved the proposed Finance Bill 2025 presented by Treasury Cabinet Secretary John Mbadi on Tuesday.

In a dispatch shared soon after a briefing at State House, Nairobi, the Cabinet highlighted key proposals in the Bill that align with the goals set by the government for the fiscal year 2025/2026.

Among the proposals are law amendments that will shake up current policies in counties, ministries, State Departments, small businesses, and tax collection by the Kenya Revenue Authority (KRA).

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Finance Bill 2025 has proposed a new law - Draft Pest Control Products Bill 2024 - which will change regulation of pest control products in Kenya.

The new law will mandate the creation of Pest Control Products Authority to align policies on fumigation products with constitutional and international standards, and enhance food safety, environmental protection, public health, and agricultural exports.

Finance Bill 2025 proposes amendments to the VAT Act, Excise Duty Act, and the Tax Procedures Act which will help small business owners access immediate tax relief on the cost of their everyday tools and equipment, within the year of purchase.

New judges appointed in the Judiciary will see changes to their pension and retirement benefits away from the current Pensions Act. 

Under a new law - Judges Retirement Benefits Bill, 2025 - These will be enhanced through Defined Benefit & Contribution Systems as part of public sector pension reforms. 

Should the Bill become law, the new judges will enjoy monthly pensions, gratuities, medical coverage, and diplomatic privileges for themselves and their spouses when they retire.

The Bill proposes changes that will require employers to automatically apply all eligible tax reliefs and exemptions when calculating Pay As You Earn (PAYE) taxes for employees.

According to a proposal in Finance Bill 2025, employed Kenyans will no longer be required to apply for tax refunds with KRA.

Should the Finance Bill become law, Kenyans entitled to retirement benefits will enjoy higher gratuity payments, whether in public or private pension schemes, as they will now be fully tax exempt.

As a response to the 2023 El Nino crisis, when the National Treasury was directed to release emergency funds to counties, Finance Bill 2025 has proposed changes for county budget allocation planning.

The Finance Bill has proposed an amendment to the Public Finance Management Act which will require all county governments to establish County Emergency Funds.

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Under the proposed Finance bill, The Capital Markets Act will be amended to remove shareholder limits in regulated institutions. 

The government hopes that this will stimulate investment in Kenyan companies and deepen financial markets.