Treasury CS Mbadi Defends Finance Bill 2026, Dismisses Claims of Hidden Taxes
Treasury Cabinet Secretary John Mbadi has defended the Finance Bill 2026, saying it does not introduce hidden or punitive taxes, while clarifying proposals on mobile phone levies, digital assets and payment systems amid ongoing public debate and consultations.
National Treasury CS John Mbadi defends the Finance Bill 2026, dismissing claims of hidden taxes and outlining key reforms on mobile phone taxation, digital finance and payment systems. Photo/Courtesy
By Ruth Sang
Cabinet Secretary for the National Treasury John Mbadi has defended the Finance Bill 2026, dismissing public concerns that it contains punitive or hidden tax measures, while clarifying several proposals that have triggered national debate.
Mbadi said the legislative process remains anchored in constitutional public participation, noting that ongoing discussions around the Bill are part of normal fiscal policy formulation.
“Public participation and sectoral engagement on fiscal policy matters are part of the constitutional legislative process,” he said, adding that some public commentary had misrepresented the contents of the Bill.
He further noted that certain media reports had conflated the Finance Bill 2026 with earlier or withdrawn proposals, leading to what he described as inaccurate interpretations of the current draft.
“The Bill does not include Value Added Tax on bread, a motor vehicle circulation tax, eco-levy provisions or government access to mobile money transaction data,” Mbadi clarified.
On mobile phone taxation, the CS explained that the current system includes multiple levies such as VAT, excise duty, import duty, import declaration fees and the railway development levy, which together amount to about 55.5 per cent.
He said the Bill proposes consolidating these charges into a single 25 per cent excise duty applied at the point of activation of mobile phones.
“The proposal seeks to simplify the existing structure by replacing multiple taxes with a single 25 per cent excise duty on mobile phones,” Mbadi stated.
He added that the reform would remove several existing levies, including import duty, VAT and other related charges on mobile phones, to streamline tax administration.
On digital finance, Mbadi said the Bill introduces a reporting framework for virtual asset service providers through amendments to the Tax Procedures Act, aimed at integrating digital assets into the formal tax system.
He also clarified that the reforms seek to ensure tax equity by aligning emerging digital transactions with traditional financial reporting systems.
On digital payments, the CS said the Bill provides clarity on the taxation of fees charged by payment platforms and card providers, following court rulings that created uncertainty in the sector.
Mbadi dismissed claims that the Bill introduces a five per cent withholding tax on digital content monetisation, stating that the provision is not included in the Finance Bill 2026.
He further clarified that mobile money operators such as Safaricom are not targeted under the proposed reforms, emphasizing that the focus is on digital intermediaries and service providers.
Mbadi urged continued public engagement on the Bill, saying stakeholders would still be consulted before the proposal is tabled for final consideration in Parliament.
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