Kenya People Budget 2026: Fuel, M-Pesa & Housing Taxes

The recently released 2026/27 budget of Kenya has ignited controversy in the country regarding taxes and living expenses. Kenya People Budget 2026, While Parliament plans to allocate KSh 4.82 trillion in expenditure, there has been another proposal of a budget dubbed “The People’s Budget.”

This budget is meant to reduce fuel expenses, improve earnings, and minimize the burden of taxation on the people of Kenya. Below, we shall explore some of the changes you can expect.

Fuel Price Could Be a Big Issue Too

Fuel cost is another big issue that will affect Kenyans, considering its impact on the cost of transport, food items, and general business operations.

There are several fuel-related revenue measures contained in the Finance Bill.

The People’s Budget, on the other hand, is proposing the removal of:

Road Maintenance Levy
Railway Development Levy
Import Declaration Fee on fuel

It has been estimated that the elimination of these fees will lead to a reduction in the cost of diesel to about KSh 170 per litre.

Furthermore, the opposing side is advocating for a KSh 30 tax rebate per litre of fuel that will be used in agricultural machinery as a way of lowering the cost of producing food.

Tax Imposed on M-Pesa Payments

The owners of mobile phones will have to pay taxes due to the suggestion brought about by the Finance Bill.

This will include granting the Kenya Revenue Authority access to customers’ transaction details as a way of enforcing tax compliance and ensuring proper declaration.

Proponents claim that this will be instrumental in increasing the number of taxpayers.

On the other hand, opponents have voiced out their concerns regarding privacy issues.

Proposed Smartphone Tax

Another proposal gaining attention is a proposed 25% excise tax on smartphones.

The tax would apparently be imposed upon activation of phones, making ownership of a smartphone more expensive in Kenya.

The proposal is being criticized by industry insiders for possibly hindering technological growth, especially among poor people who need their phones for online transactions, studies, and other purposes.

Debate Over Housing Levy Goes On

The highly contentious Housing Levy continues to be a hot political topic.

The government wants to keep the levy as a key part of its housing policy.

On the other hand, the opposition is proposing to scrap the levy through its People’s Budget.

Proponents of the proposal claim that abolishing the levy will immediately boost disposable incomes for workers at a time when their living costs are increasing.

Proposals for Landlords and Businesses

The Finance Bill also contains provisions that target landlords and taxpayers.

Rental Income Tax Increase

Landlords may face an increase in the tax rate for rental income from 7.5% to 10%.

KRA Enforcement Powers

The Kenya Revenue Authority will gain more powers to enforce tax compliance through asset freezes based on agency notices, despite any pending legal cases.

Relief through Tax Amnesty

There is good news for those who have cleared their main tax bills; they can enjoy an amnesty in relation to penalties and interest charges.

Next Steps?

Proposals are pending further scrutiny in Parliament.

Members of Parliament will deliberate on the Finance Bill and the budget allocations until such time as decisions are made.

While negotiations go on, Kenyans will keenly monitor the balance struck in the budget between raising taxes and the cost-of-living crisis facing the citizens.

Conclusion

In the discussion of the Kenya People’s Budget 2026, two contradictory views emerge for the future economic landscape in the country. As the government plans to raise extra revenue by means of taxation and enforcement mechanisms, the opposition calls for reduced fuel prices, abolition of the Housing Levy, and a general reduction in taxes.

The decision will directly affect the prices of fuel, users of mobile money, customers of smartphones, landlords, and many families in the country.