Pan-African law firm Bowmans has raised red flags over key provisions in Kenya’s Finance Bill 2026, cautioning that several proposals could place added pressure on businesses and consumers.
In its analysis, the firm acknowledged the government’s push to expand the tax base and boost revenue but warned that the approach may trigger unintended economic strain. Bowmans pointed to increased uncertainty and the risk of double taxation, which could weaken Kenya’s appeal to investors.
Among the major concerns is a proposal to shorten the tax filing deadline by two months to April 30. The firm argues this would raise compliance costs, forcing companies to fast-track audits and tax preparations within tighter timelines.
Bowmans also flagged plans to introduce withholding tax on card transaction fees, including interchange and merchant service charges. It noted that this could complicate compliance, as such fees are typically processed automatically within banking systems.
The proposed removal of VAT exemptions on fintech services has also drawn criticism. According to Bowmans, subjecting services like money transfers and payment processing to VAT could make digital financial services more expensive and less competitive compared to traditional banking.
Additionally, the firm questioned the planned increase in residential rental income tax from 7.5 per cent to 10 per cent, warning it could encourage non-compliance among landlords.
In the corporate space, Bowmans opposed a proposal allowing the Kenya Revenue Authority to treat at least 60 percent of undistributed profits as taxable dividends. The firm termed the move retrogressive, arguing it overlooks the need for reinvestment and sound cash flow management.
Concerns were also raised over higher excise duties on mobile phones and communication devices, which could push up retail prices and slow local manufacturing growth.
Despite its criticism, Bowmans welcomed parts of the Bill, including clearer trust taxation rules, reforms to penalty systems, and the extension of the tax amnesty programme.
RANKINGS🌍| Please join us in congratulating Vruti Shah and Lerato Thahane on their inclusion in @lawdotcomINTL's 15 Rising Stars Shaping Africa M&A in 2026 list. This list spotlights the next generation of dealmakers leading complex, cross-border transactions. Congratulations!
A new petition has been filed in court seeking to block 13 politicians among them Kenya Kwanza presidential running mate Rigathi Gachagua from contesting in next week’s polls over integrity issues. #KenyaDecides2022
This morning we learnt that Evans Monari, senior partner in our Nairobi office had passed. Kenya's legal community's lost a highly respected lawyer & we've lost a partner, colleague & friend. We send our condolences to Evans’ family during this time. RIP Evans, you'll be missed.
A very fitting tribute to a fine gentleman, a great lawyer and a superb human being. we will miss you Chairman and will keep your legacy strong. I am very honoured to have worked with you. @Bowmans_Law
The Great Baobab and provider of shade for junior and senior Partners when they need respite from the harshness of practice, has fallen. We are all poorer for it. An incredibly sad day in the life of @Bowmans_Law. Hamba kahle, Rob. Ugqatso ulufezile.
WATCH 🇰🇪| Everyone's had a rough time due to #COVID19. To blow off some steam, our Nairobi office put a Kenyan twist to the #Jerusalemadancechallenge & danced to @sautisol's #MidnightTrain, a song that guides us about life's hurdles. In loving memory of our colleague, Sam Omondi.
LISTEN 🇰🇪| Due to the adverse effects of the #COVID19, many businesses have had to consider #restructuring. In this episode, @ndegwapower engages partners, Joyce Mbui and @vruti04, on what needs to be considered during the #restructuringprocess.
https://t.co/OEqO6LrIk0
Obizz Podcast Series (11) - Nigel Smith of KPMG and Vruti Shah of Bowman’s provide insights into Business Restructuring during the Pandemic
https://t.co/uBofWTXUxp
“Obizz Podcast Series (4) - In conversation with Pankaj Shah on his life journey, meeting with Mother Teresa and the impact, achievements and mission of Team Pankaj”
https://t.co/MmnyCmlhzb
Obizz Podcast Series (6) - Dr Maira Bholla (Ph.D., M.Phil., https://t.co/5fqjsnhlZG.), Molecular Epidemiologist and Healthcare Consultant discusses the latest COVID-19 situation in Kenya
https://t.co/0IFsh1p8M0
Obizz Podcast Series (5) - Conversation with Sundeep Raichura, CEO of Zamara on the importance of Retirement Planning and Pensions
https://t.co/6cXPJffdtD
Obizz Podcast Series (2) - Conversation with Dr. Amit Thakker of Kenya Covid-19 taskforce.
Dr. Amit Thakker, Chairman of the Kenya Healthcare Federation explains current Covid-19 situation in Kenya as we plan to enter Phase 2 of the pandemic management.
https://t.co/iUpatimS02
Co-authored this article on how cross-border data transfer laws affect digital trade with my Senior @Sakaja (who I look up to btw) published on page 3 on today's Business Daily. Enjoy!
https://t.co/xegf2RlK1B
De-stressing about distressed debt
We had a very engaging session this morning discussing distressed debt and turnaround options available to financially troubled companies. Adopting a business rescue mindset is key. #distresseddebt#turnaround#businessrescue