Treasury Fires Back at Finance Bill ‘Fake Taxes’ Reports as Kenyans Brace for Heated Debate

 The National Treasury has issued a strongly worded clarification seeking to counter what it describes as widespread misinformation surrounding the proposed Finance Bill 2026, amid rising public concern over alleged new taxes targeting digital transactions, mobile money, and smartphones.

In a press release titled “Public Clarifications on Certain Tax Proposals Under the Finance Bill, 2026,” Treasury officials accused sections of the public and online commentators of spreading inaccurate interpretations of the bill, creating confusion and anxiety among Kenyans already burdened by economic hardship and rising living costs.

The statement comes after social media platforms were flooded with claims that the government intended to introduce a 5 percent tax on digital payments and mobile money transactions — allegations that sparked outrage from consumers, small businesses, and digital entrepreneurs.

However, the Treasury categorically denied the reports, stating that no such proposal exists in the Finance Bill 2026.

“The Finance Bill does not contain a proposal introducing a 5% withholding tax on digital transaction services or mobile money,” the statement clarified.

Officials emphasized that the government remains committed to supporting digital innovation and financial inclusion, noting that mobile money platforms have become essential tools for millions of Kenyans and businesses.

Mobile Phone Tax Clarified

The Treasury also sought to explain the controversial proposal on mobile phone taxation, which has drawn criticism from consumer groups and technology stakeholders.

According to the clarification, the proposed 25 percent excise duty would apply only to imported fully assembled mobile phones and not to locally manufactured devices.

Treasury officials argued that the move is intended to encourage local assembly and manufacturing while reducing dependence on imported electronics.

“The proposal is primarily conceived as a tax simplification and rationalization measure rather than the introduction of a new tax on digital access,” the statement noted.

The government added that locally assembled phones would continue enjoying tax incentives designed to support domestic production and job creation.

Despite the clarification, critics argue that the proposal could still increase the cost of smartphones and internet access, potentially slowing Kenya’s rapidly growing digital economy.

Focus on Virtual Assets and Digital Services

The Finance Bill 2026 also proposes changes affecting virtual asset service providers and digital financial platforms. Treasury defended the proposals, saying they are intended to improve oversight, enhance accountability, and align Kenya’s tax system with the changing realities of the digital economy.

Officials noted that online businesses, fintech firms, software providers, and payment networks have transformed how commerce is conducted and therefore require clearer taxation and regulatory structures.

The Treasury further explained that the measures aim to create fairness between traditional businesses and digital operators while broadening the country’s tax base.

Public Anxiety and Economic Pressure

The clarification comes at a time when many Kenyans are increasingly sensitive to tax-related announcements following several years of rising fuel prices, inflation, and higher living expenses.

Previous Finance Bills have triggered nationwide protests and heated political debate, with critics accusing the government of overtaxing citizens while failing to address unemployment and economic inequality.

As a result, even unverified reports about potential taxes on mobile money and digital transactions quickly fueled public anger online.

Economists warn that uncertainty surrounding tax policy can negatively affect investor confidence and consumer spending, especially in sectors heavily reliant on digital payments.

Treasury Urges Public to Verify Information

The National Treasury has now urged Kenyans to rely on official government communication when interpreting the Finance Bill and avoid circulating misleading information online.

Officials insisted that the Finance Bill 2026 is still subject to parliamentary review and public participation before becoming law.

“The Treasury remains committed to constructive public engagement throughout the Finance Bill process,” the statement said.

Parliament is expected to begin deliberations on the bill in the coming weeks, setting the stage for another intense national debate over taxation, economic recovery, and the future of Kenya’s digital economy.