The National Treasury has dismissed claims that the Finance Bill 2026 seeks to grant the Kenya Revenue Authority (KRA) powers to monitor mobile money transactions.
In a clarification issued after public concern over the proposed law, the ministry, headed by John Mbadi, stated that the Bill does not contain provisions allowing tax authorities to access personal transaction information from mobile money platforms.
"The Finance Bill, 2026, contains no provision granting tax authorities access to personal mobile money transaction data. Existing data protection laws and privacy safeguards remain fully in force, and no additional access rights are being introduced under this Bill," Treasury stated.
The ministry also addressed concerns surrounding the proposed 25% excise duty on mobile phones, saying the measure is intended to simplify taxation within the sector rather than increase the cost burden on consumers.
According to Treasury, the proposal seeks to merge several existing charges on phones, including Value Added Tax (VAT), the Import Declaration Fee (IDF), and the Railway Development Levy (RDL), into a single framework.
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Officials argued that the changes are designed to make phones more affordable, contrary to fears that the Bill would drive up device prices.
"The tax has been designed to avoid pricing out entry-level users. The structure proposed protects low-cost devices and essential transactions. The main objective remains to broaden the tax base without shrinking digital participation," Treasury noted.
The government further clarified concerns over the proposed point-of-activation rule, which had sparked fears that users could be taxed again when inserting new SIM cards into already purchased phones.
Treasury explained that the Communications Authority of Kenya will formulate regulations to prevent double taxation on devices that have already been taxed, including second-hand phones, tourist devices, and gadgets used temporarily in the country.
On digital payment services, Treasury said the Bill does not introduce fresh taxes on card transaction charges or digital payments.
Instead, it aims to define which digital services should fall under taxation.
The ministry noted that some fintech firms have been operating in an unclear space between tax-exempt financial services and taxable technology services.
Under the proposal, taxation would target areas such as payment processing systems, software platforms, and digital infrastructure, while traditional banking activities like lending and deposit-taking would remain unaffected.
Treasury said the proposed framework is meant to eliminate legal uncertainty, promote fairness between banks and fintech companies, and establish a clearer tax structure for digital payment services.
The ministry also clarified that the Bill does not create a new tax on cryptocurrencies or virtual assets. Instead, it introduces reporting and disclosure requirements for operators in the sector.
If passed, crypto platforms will be required to keep transaction records and share relevant data in the same way banks and other financial institutions do.
Treasury argued that the rapid growth of virtual assets outside traditional oversight systems has created challenges in tracking ownership and transactions.
At the same time, the ministry reiterated that there is no proposal in the Finance Bill 2026 to reintroduce VAT on bread or the motor vehicle circulation tax that had appeared in the Finance Bill 2024 before being withdrawn following public protests.
Treasury also denied reports that the Bill seeks to introduce a 5 per cent withholding tax on digital content monetisation for content creators.
This comes over a week after Mbadi announced that the proposal to impose a five percent presumptive tax on mitumba imports had been dropped.
Speaking during a press conference on Monday, May 11, he revealed that the National Assembly had rejected the proposal and that it could be left out of the final draft of the Finance Bill 2026.
However, Mbadi intimated that he will still push for the proposal to be effected as it was intended to benefit mitumba traders.
"On the taxation around mitumba, I have noticed that it has been dropped out of the final bill that has come from the National Assembly. Of course, the final bill comes from there. Our proposal was to have it, and I still insist that we should," he stated.
Mbadi claimed that he hosted a contingent of mitumba traders at the National Treasury, and the decision to impose the 5 percent presumptive tax was reached.
As such, he explained that apart from 16% value-added tax on the imported goods, the government would only charge the traders 1.5 percent of the value of the goods as income tax
The government would then assume that the traders would make a profit worth 5 percent of the value of the imported goods.
"For income tax, we deem 5 percent of the customs value as profit, and then we tax that 5 percent at 30 percent to give you 1.5 percent. This becomes the final tax, and nobody will go after the business people again," he explained.
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