Professional bodies representing bankers and accountants in Kenya have raised concerns over several proposals contained in the 2026 Finance Bill, warning that the measures could increase the cost of living and slow economic growth.
Leaders from the Institute of Certified Public Accountants of Kenya and the Kenya Bankers Association presented their concerns before the National Planning Committee, where they urged lawmakers to reconsider some of the proposed taxes.
One of the biggest concerns is the planned introduction of Value Added Tax (VAT) on digital financial services such as money transfers, payment processing, and merchant transactions.
According to the bankers and accountants, financial services play a key role in the economy and should not be treated like ordinary consumer products.
“If you look at what M-Pesa has done in this country, it would really be sad to impose Value Added Tax on M-Pesa,” said KBA Chief Executive Officer Raimond Molenje.
The groups warned that the new taxes could make digital transactions more expensive for ordinary Kenyans and businesses that rely heavily on mobile money and electronic payments.
They also opposed a proposal to introduce Withholding Tax on card transactions involving services such as VISA payments.
The organizations argued that such transactions involve many parties, making it difficult to determine who should actually pay the tax.
“This will only increase the cost of electronic payment systems and create confusion in implementation,” one representative explained during the discussions.
Apart from opposing new taxes, the professional bodies also called for relief for salaried workers already struggling with multiple deductions.
They proposed a 5 percent reduction across all Pay As You Earn (PAYE) tax bands to help employees cope with deductions such as the Housing Levy and the Social Health Insurance Fund (SHIF).
The accountants further suggested increasing the lowest PAYE tax band from Ksh 24,000 to Ksh 30,000 to allow workers to retain more of their salaries.
“A more progressive tax rate would help increase disposable income among individuals, which would in turn enhance their purchasing power, savings and investment capacity,” an ICPAK representative told the committee.
However, officials from the National Treasury expressed concern that accepting the proposals could create a revenue gap of nearly Ksh 35 billion.
