Finance Bill 2025: 4 Tax Reliefs Targeting Businesses, Employees and Employers

Hello Moneymakers, Washington here. In today’s newsletter, we are covering the approved Finance Bill 2025 by highlighting key proposals that are targeting businesses, employees and employers.

Housekeeping: This Newsletter will take a break tomorrow to honour Labour Day celebrations.

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‍Cabinet Approves Finance Bill 2025

President William Ruto’s Cabinet approved the Finance Bill 2025 on Tuesday, April 29. The bill includes proposals to offer taxpayers a reprieve to different clusters of Kenyan taxpayers.

As highlighted in a Cabinet dispatch, the 2025 bill aims to streamline tax refund processes, sealing legal gaps that delay revenue collection, and reducing tax disputes. Here are some of the key proposals targeting various groups.

‍Why It Matters: Last year, the government was forced to shelve the Finance Bill following protests opposing the additional Ksh300 billion strain Ruto’s administration had imposed on the taxpayers. The timing of the new bill is also tricky since the BBC, in an exposé, unmasked the identity of KDF soldiers who spearheaded the fatal shooting during the Gen Z protests.

‍Pensions

The government is proposing to make all gratuity payments made by both private and public pension schemes tax-exempt. This will see retired Kenyans take home more.

‍Tax Relief for Employees

Additionally, the National Treasury is proposing changes to tax law that will require employers to automatically apply all eligible tax reliefs and exemptions when calculating Pay As You Earn (PAYE) taxes for employees.

“Currently, many employers omit these reliefs, forcing employees to seek refunds from the Kenya Revenue Authority,” read the dispatch in part.

‍Tax Relief for Businesses

Likewise, the bill to be tabled in Parliament will propose amendments to allow businesses to fully deduct the cost of everyday tools and equipment in the year of purchase. For businesses, this will reduce delays in getting tax reliefs.

‍Tax Refund Reforms 

Finance Bill 2025 will also have proposals that tighten laws for tax refunds, as they have been manipulated by some businesses.

“Cabinet also approved the Finance Bill, 2025, which focuses primarily on closing loopholes and enhancing efficiency, including addressing loopholes related to tax expenditures that have historically been exploited to siphon funds from public coffers, such as through inflated tax refund claims,” read the dispatch in part.

Land Buyers Record Appetite for Land Prices in Kiserian, Juja, and Thika 

Amid high construction costs, developers and land buyers have shown great interest in areas that offer affordable land prices.

In this year’s 1st quarter report by HassConsult, Kiserian, Juja, and Thika were among the areas that registered impressive growth in land prices because of demand.

An acre in Kiserian, Juja and Thika was sold at Ksh12.6 million, Ksh24.2 million and Ksh30.2 million, respectively.

‍Money254.co.ke covered this report extensively. Read here.

‍Nairobi Landlords Hit by Trump's Freeze on USAID

Many upmarket landlords have been affected by President Donald Trump’s move to freeze USAID, which was supporting many organisations in Kenya.

As reported by the People Daily, many of the organisations' employees had rented spaces in the upmarket estates of the city. Therefore, the freeze of USAID has seen employees of local organisations in Kenya face layoffs.

"The fall in asking prices revealed concerns about a fall in demand after the US cut off funding for its USAID programme and its affiliated programmes in Kenya. This action has led to mass lay-offs, which affect the target market for the higher-end rental segment," People Daily quoted HassConsult.

Also Read: 8 Online Scams That Robbed Many Kenyans

‍US Flags Kenya Over Counterfeit Goods

The United States government has flagged Kenya as among the leading markets for counterfeit goods in the world.

According to the report covered by the Business Daily, most of the counterfeits sold in Kenya come from China, India, Turkey and Vietnam.

The 2025 Special 301 Report on Intellectual Property and Enforcement listed some of the most available counterfeit goods in Kenya as electronics, personal care products, medicine, Shoes and sporting wear, among others.

“The counterfeits are shipped either directly to purchasers or indirectly through transit hubs, including in Chile, Hong Kong, Kyrgyz Republic, Singapore, Türkiye, and the United Arab Emirates to third-country markets such as Brazil, Kenya, Mexico, Nigeria, Paraguay, and Russia, that are reported to have ineffective or inadequate IP enforcement systems,” read the report in part.

Also Read: Highlights of the 2024/25 Budget Proposal Read by Treasury CS Njuguna Ndung’u

‍Kenya to Review Budget to Cut Deficit

Kenya is set to tighten its belt and review the proposed Ksh4.3 trillion budget. This is a decision that was undertaken during a Cabinet meeting.

According to Reuters, this move will see the government take austerity measures that will result in the lowering of the budget deficit. The government is usually forced to borrow to fund the deficit.

Meanwhile, Citizen Digital has revealed that the government will fund the next budget without financial support from the IMF.

Treasury CS John Mbadi detailed that Kenya was still in talks with the IMF over a new deal after opting out of the 9th review, which would have seen the government receive Ksh109.4 billion. 

 "The good news is that this is a program that we will negotiate. The other one was negotiated by the previous government. Now this one we will negotiate, and we will negotiate within the confines of what is happening in the global economy and also back at home. So, in a nutshell, I foresee good deliberations going forward," Treasury CS John Mbadi was quoted.