President William Ruto faces the potential for a new wave of protests from Gen Z in response to the recently introduced Finance Bill 2026. This sweeping tax proposal has drawn criticism for potentially resurrecting the economic hardships that ignited nationwide demonstrations two years ago.
The National Assembly Finance Committee, led by Kimani Kuria, presented the bill in Parliament. It proposes new taxes on mobile phones, bottled water, digital transactions, betting winnings, coal, and cryptocurrency services, while also enhancing the enforcement powers of the Kenya Revenue Authority (KRA).
This proposal comes just two years after the Finance Bill 2024 led to unprecedented protests from Gen Z across Kenya, culminating in the storming of Parliament on June 25, 2024, and subsequently, the withdrawal of that bill by President Ruto due to widespread public outcry.
Analysts express concern that these new proposals could reopen old political wounds at a time when millions of young Kenyans already face unemployment, rising food prices, and a worsening cost of living crisis.
A significant source of public frustration is the proposed 25 percent excise duty on mobile phones for cellular networks, payable upon device activation. For many young Kenyans, smartphones serve as essential tools for work, education, online businesses, and digital payments.
Under this proposal, a Ksh15,000 smartphone could incur an additional Ksh3,750 tax, making these devices less affordable for average users.
Treasury Cabinet Secretary John Mbadi has defended the proposal, asserting that the reforms will not necessarily lead to increased phone prices. “Phone prices will not rise because we have removed all the other taxes and replaced them with one single tax,” he stated during a media briefing on May 11, 2026.
According to the Treasury CS, the previous tax framework subjected imported phones to multiple levies, including customs duty, Import Declaration Fees, VAT, and the Railway Development Levy, which he described as creating an effective tax burden of nearly 55 percent.
However, tax experts and digital rights activists argue that these changes merely transfer the burden from importers to consumers. A legal analysis by law firm Bowmans cautioned that while import taxes may decrease, “the tax cost would shift to excise duty charged upon the local purchase of the phone,” effectively leaving Kenyans with the same burden in a different form.
The bill also proposes a new excise duty of Ksh6.41 per litre on bottled water, which is likely to impact urban households the hardest, as many families depend on purchased water due to unreliable public supply. Additionally, the bill would increase the cost of fruit juices, with unsweetened juice attracting a Ksh14.14 per litre tax and sweetened products taxed at Ksh20 per litre.
These proposals emerge amid rising inflation, which reached 5.6 percent in April, driven primarily by increases in food and fuel prices. The escalating economic strain has heightened public frustration, particularly among young people who were central to the 2024 demonstrations.
Unlike previous tax protests led by political opposition figures, the Gen Z protests were decentralized, digitally organized, and fueled by anger over economic exclusion, unemployment, and government excesses. Bowmans warns that the risk of reigniting that anger is substantial, as the bill directly targets essential consumption and digital survival tools heavily utilized by young Kenyans.
The bill also expands taxation into digital finance and betting. It proposes a 20 percent withholding tax on winnings from betting, lotteries, and gaming, in addition to the existing five percent excise duty on deposits into betting wallets. Virtual asset service providers, including cryptocurrency exchanges and digital wallets, would face a 10 percent excise duty on service fees.
The government argues that these measures are necessary to broaden the tax base and reduce reliance on borrowing amidst rising fiscal pressures. The Treasury links this aggressive revenue strategy to increasing debt obligations and global economic shocks, including fuel price volatility tied to tensions in the Middle East. Critics, however, contend that the government is once again turning to ordinary citizens rather than addressing government expenditure and corruption.
Equally contentious are the new powers proposed for the KRA. The bill aims to amend the Tax Procedures Act to empower the Commissioner to generate pre-populated tax returns using data from electronic tax systems. Tax experts caution that this could shift the burden of proof onto taxpayers, requiring individuals and businesses to disprove KRA assessments.
The bill introduces severe penalties for non-compliance with electronic tax systems, including fines of up to twice the tax due or Ksh100,000 for businesses. Small traders express concern that these measures could penalize them for technical failures beyond their control. Additionally, the proposed law grants the KRA broader anti-avoidance powers, allowing officials to revisit transactions dating back five years if they suspect the “main purpose” was to gain a tax benefit. Bowmans warns that these provisions could significantly heighten the risk of tax disputes and retrospective adjustments.
For many Kenyans, the symbolism of the bill poses a political risk for President Ruto. Introducing such painful tax measures less than a year before the 2027 General Election campaign season—a time when administrations typically aim to alleviate economic pressure on voters—could backfire. The Finance Bill 2026 is largely interpreted by segments of the public as evidence that the lessons from the 2024 protests were not learned.
Despite Treasury CS John Mbadi’s insistence that the taxes are necessary for economic stabilization, the political ramifications for President Ruto remain significant. For a generation already grappling with joblessness, rising living costs, and diminishing trust in institutions, the Finance Bill 2026 could evolve into more than just a tax debate; it may serve as the catalyst for another nationwide revolt.
