Finance Bill 2025: List of Steps and Stages Before Signing by President Ruto
- The Finance Bill 2025 will undergo multiple stages, including the First Reading, public participation, committee review, and debates in Parliament
- Public participation is mandatory, with citizens, businesses, and stakeholders invited to provide feedback through hearings and written submissions to inform amendments
- After detailed scrutiny and amendments, the bill proceeds to the Second and Third Readings in the National Assembly, followed by a final vote to determine its passage
Elijah Ntongai, a journalist at TUKO.co.ke, has more than four years of financial, business, and technology research and reporting expertise, providing insights into Kenyan and global trends.
On April 30, 2025, the Finance Bill 2025 was tabled in the Kenyan Parliament, marking the start of a critical legislative process that will shape the nation’s fiscal and taxation policies for the 2025/26 fiscal year.
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The Finance Bill outlines proposed tax measures, revenue-raising strategies, and financial policies that impact citizens, businesses, and government operations.
Given its far-reaching implications, the bill undergoes a rigorous, multi-stage legislative process including public participation in line with the Constitution of Kenya 2010.
Kenya’s legislative framework
Kenya’s legislative process is governed by the Constitution of Kenya 2010 and the Standing Orders of the National Assembly and Senate.
The Finance Bill 2025, having already been tabled, will navigate a series of well-defined stages before becoming law.
1. First Reading
The legislative journey begins with the First Reading, where the bill is formally introduced in the National Assembly by reading its title and objectives.
No debate or voting occurs at this stage; it is a procedural step to notify MPs of the bill’s introduction. The Finance Bill 2025 underwent the First Reading by the Speaker of the National Assembly, Moses Wetangula.
Following the First Reading, the bill was forwarded to the Departmental Committee on Finance and National Planning, which oversees the bill's initial scrutiny and public engagement.
2. Public participation
Public participation is a mandatory and pivotal stage for the Finance Bill, as required by Article 210 of the Constitution.
The Finance Committee of the National Assembly will organise public hearings, invite written memoranda, and engage stakeholders, including citizens, businesses, professional associations, and civil society organisations.
These consultations are expected to ensure the bill reflects public needs and mitigates adverse economic impacts.
The Finance Bill 2025 is expected to attract significant public interest, given recent controversies, such as the 2024 protests over proposed tax hikes.
The committee will compile public input into a report, which will inform subsequent stages and potential amendments.
3. Committee consideration
After public participation, the Departmental Committee on Finance and National Planning will conduct a clause-by-clause review of the bill, analyse its provisions, public feedback, and technical feasibility.
The committee may consult experts, such as economists, tax specialists, and legal advisors, to assess the bill’s implications.
The committe will then proposed amendments in line with the public participation inputs and concens and prepare a report summarising the findings and recommendations.
The committee’s report is tabled in the National Assembly, and it serves as the foundation for parliamentary debates in the Second Reading.
4. Second Reading
After the committee and public participation stages, the Finance Bill goes back to the National Assembly for the Second Reading, where the MPs debate the bill in a plenary session.
The committee’s report will guide the discussion, highlighting public views and proposed changes. MPs will assess whether the bill aligns with national priorities, such as economic growth, poverty reduction, or debt management.
A vote will be taken at the end of the debate; if approved, the bill will advances to the next stage.
If rejected, it may be sent back for further review or abandoned, though this is rare for finance bills due to their budgetary significance.
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5. Committee of the Whole House
In the Committee of the Whole House, the National Assembly will transform into a committee chaired by the deputy speaker to examine the bill clause by clause.
MPs will propose and debate amendments, and will vote for each clause and amendment.
The process will culminate in a report submitted to the House, detailing approved changes. Then the National Assembly will conduct a plenary discussion of the Committee of the Whole House’s report.
7. Third Reading
The Third Reading is the final debate in the National Assembly, focusing on the bill’s overall content.
No new amendments will be permitted, except for minor clarifications or corrections.
MPs will discuss the bill’s readiness for passage, and take final vote to determine if the bill advances to the next stage. For many of the bills, the next stage is the Senate, however, if the bill passes it will be forwarded to the president.
8. Presidential Assent
The president will have 14 days to review the bill and take one of two actions:
- Assent: The president will sign the bill, making it an Act of Parliament and law upon publication in the Kenya Gazette.
- Referral: The president will return the bill to the National Assembly with a memorandum outlining reservations, suggesting specific amendments.
If the president refers the bill back to Parliament, the MPs can amend the bill as recommended and resubmit it to the president, who must assent within seven days.
MPs can also choose to pass the bill unchanged with a two-thirds majority in the National Assembly and override the president’s objections. If this happens, the president must then assent or refer it to the Supreme Court for an advisory opinion, though this is rare.
If the president neither assents nor refers the bill within 14 days, it is deemed assented, ensuring the process does not stall indefinitely.
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Notably, the Finance Bill often sparks debate due to its impact on the cost of living, business operations, and economic equity. Recent finance bills, such as the 2024 version, faced public protests over proposed taxes, which were perceived as burdensome, highlighting the delicate balance between revenue generation and public welfare.
Proposed changes in Finance Bill 2025
As reported earlier on TUKO.co.ke, the Finance Bill 2025 proposes sweeping changes to Kenya’s tax policies and revenue-raising measures to finance the KSh 4.3 trillion budget for FY 2025/26.
The bill targets key tax heads, including PAYE, VAT, income tax, excise duty, and the Tax Procedures Act, aiming to enhance efficiency, streamline tax refunds, and limit new tax burdens on employment income
It supports fiscal consolidation, aiming to reduce the budget deficit from 5.1% to below 4.5% of GDP, with a medium-term goal of 2.7%. Retirees will benefit from tax exemptions, while employers are urged to apply all PAYE reliefs to reduce refund claims.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
