Stakeholders have raised concerns over the proposed Income Tax Amendment Bill sponsored by National Assembly Finance Committee Chair Kimani Kuria, warning that if passed in its current form, it could unfairly shift the tax burden to ordinary salaried Kenyans.
Appearing before the National Assembly’s Finance Committee, the stakeholders argued that the bill could allow majority shareholders, especially in closely held companies, to receive economic benefits equivalent to dividends without paying the required taxes.
They warned that this would violate the constitutional principle of equitable burden sharing in taxation, noting that only about 3.5 million salaried Kenyans in the Pay As You Earn (PAYE) bracket would continue to shoulder the tax burden, while wealthy shareholders evade taxation.
According to the stakeholders, the proposed changes risk making the rich even richer while increasing pressure on ordinary taxpayers who already bear the largest share of direct taxation.
Controller of Budget Raises Red Flag
The Controller of Budget has also raised serious concerns over the proposed amendments, warning that key gaps in the draft law could weaken financial oversight and expose public funds to abuse.
The office cautioned that weak accountability structures within the bill could create opportunities for tax leakages and reduce transparency in revenue collection and management.
Sovereign Wealth Fund Bill Faces Constitutional Questions
Stakeholders also took issue with the proposed Sovereign Wealth Fund (SWF) Bill, 2026, warning that it could allow billions of shillings generated from mineral and petroleum revenues to bypass the Consolidated Fund.
They argued that such a move would undermine constitutional financial oversight and expose public funds to possible misappropriation, contrary to Article 206 of the Constitution, which requires all public money to be paid into the Consolidated Fund unless otherwise provided by law.
They warned that allowing these revenues to flow outside the country’s main treasury account would weaken public accountability and parliamentary oversight.
Treasury CS Powers Questioned
Further concerns were raised over provisions granting the Treasury Cabinet Secretary sole authority to approve withdrawals from the Sovereign Wealth Fund.
Stakeholders argued that such powers currently belong to Parliament and should not be transferred to the Executive without sufficient checks and balances.
They warned that concentrating such authority in one office could weaken democratic oversight and increase the risk of misuse of public resources.
Board Appointment Process Criticised
The proposed composition of the Fund’s board also came under scrutiny, with stakeholders saying the current appointment process lacks sufficient safeguards against executive capture.
They warned that without strong independent oversight, the government could easily influence board decisions, compromising the fund’s intended purpose of protecting national wealth for future generations.
The Finance Committee is expected to continue receiving public submissions before making recommendations on both Bills.