The Finance Act, 2026 was assented to by the President on 26 June 2026, with most of its provisions taking effect from 1 July 2026, unless a different commencement date is specifically provided.
It amends several tax laws that affect businesses, employers, investors, professionals, and individual taxpayers across Kenya.
The Act Introduces Changes to:
- Income Tax
- Value Added Tax (VAT)
- Excise Duty
- Tax Procedures
- Stamp Duty
- Affordable Housing Act
- Other related tax and levy laws
Some Notable Outcomes in the Enacted Act
- Removal of the proposed Deemed Dividend provisions.
- Removal of the proposed “Pay Before You Object” tax dispute provisions.
- Removal of the proposed 25% Excise Duty on mobile phones.
- Revision of selected VAT proposals.
- Updates to certain tax compliance timelines.
- Refinement of the proposed definition of Royalty.
THK Insight
During the legislative process, the Finance Bill was reviewed by Parliament following stakeholder engagement and public participation. As a result, some proposals were amended while others were not included in the final Act.
Understanding the enacted law helps businesses and taxpayers make informed decisions, maintain compliance, and adapt to changes in Kenya’s tax environment.
Coming Next
Finance Act 2026 Explained | Issue No. 002
What changed between the Finance Bill and the Finance Act?
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