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Govt's U-Turn on Taxes, Salary Increase, US Govt Cancels Deals With Kenya
President Ruto’s administration restrained itself. The Finance Bill 2025 spells good news for salaried Kenyans. The US government cancels multi-million shilling deals with Kenya. 13 areas where rent is dropping. More money news is in today’s edition of Money Weekly Newsletter, but first, a look at the Finance Bill 2025.

Greetings and welcome to the Money Weekly Newsletter, where we dissect the Treasury’s departure from raising taxes through the Finance Bill.
On Wednesday, the Chairperson of the National Assembly's Finance Committee, Kimani Kuria, tabled the much-anticipated Finance Bill 2025.
Key highlights included the transfer of all zero-rated products to the tax-exempt category to eliminate tax refund applications, the reduction of the Export and Investment Promotion Levy from 17.5 percent to 5 percent to lower construction costs, an increase in tax-free per diems from Ksh2,000 to Ksh10,000, and the exemption of all pension gratuity payments from taxation.
Why It is Different: Notably, this Finance Bill 2025 marked a significant shift as it avoided introducing new taxes on the public, a departure from the previous two bills under President Ruto’s administration. The 2023 Finance Bill introduced a housing levy and VAT on fuel, raising Ksh211 billion in taxes. In 2024, the now-shelved bill sought to raise Ksh330 billion through VAT and excise duty increases. (Read more on the history of Finance Bills here)
The 2024 edition, the highest in the history of Finance Bills, sparked public outrage, leading to mass protests that ultimately forced President William Ruto to withdraw the bill and dismiss all cabinet secretaries.
What’s Next: The public should note that the bill may still undergo changes during its debate period in the National Assembly.
Here is a recap of this week's money news and Finance Tips below:
NEWS RECAP
What happened this week
Finance Bill 2025 Coverage
President William Ruto’s Cabinet resolved to revise the proposed Ksh4.3 trillion 2025/2026 budget downward to reduce the fiscal deficit to 4.5% of GDP, down from previous years, as part of broader austerity measures aimed at easing Kenya’s Ksh11 trillion debt burden. Cabinet Secretaries have been instructed to work with the National Treasury to implement budget cuts within their ministries
The Cabinet also approved the Finance Bill 2025, introducing tax reliefs like gratuity exemptions, and passed the Judges Retirement Benefits Bill to enhance pensions and uphold judicial independence.
Nairobi Metropolis Land Report
A report by HassConsult showed that landlords in 13 major suburbs and satellite towns have been reducing rent in an effort to attract tenants. These areas include Muthaiga, Kilimani, Gigiri, Tigoni, and Kiserian. (Tip: Landlords in some suburbs were affected by Trump's decision to freeze USAID funding.)
On the flipside, the report showed a sustained demand for land in Nairobi satellite estates, with three towns witnessing increased attraction from land buyers in the first quarter of 2025. They are Kiserian, Juja, and Thika.
KRA Turns to Digital Monitoring
The Kenya Revenue Authority (KRA) has intensified its efforts to crack down on individuals and businesses that repeatedly fail to remit their taxes on time through digital monitoring, enforcement actions, and third-party data collaboration.
US Govt Cancels Multi-Million Contracts With Kenya
Kenya is feeling the effects of U.S. contract cancellations by DOGE, which axed a Ksh35.9 million Treasury deal and removed Kenya from a vehicle distribution project. Earlier USAID cuts, part of Trump’s cost-saving measures, have halted aid-funded projects, causing tenants in affluent areas to vacate. In response, President Ruto turned to China for infrastructure funding.
School Reopening: Why Many Parents Are Struggling With Fees This Week
On Sunday, April 27, the day before schools reopened, bookshops and uniform retail centers experienced low traffic, as many parents delayed purchases. Unlike previous years, when last-minute shopping was common, this time the timing of the school reopening was cited as the primary reason for reduced activity, given that many individuals had not yet received their salaries.
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MONEY TIPS & TOOLS
This week’s finance tips
Welcome to Money254's Money Tips! Here, we share quick and easy tips that make understanding and managing your money a breeze. We break down the tricky parts of your finances and the financial landscape, making it simple and clear for you. Stay tuned for helpful tips every week.
MONEY254 #MONEYTOK OF THE WEEK
Net Pay for Some Employed Kenyans to Increase
Starting July 2025, salaried Kenyans could take home more pay as employers will now apply all tax reliefs automatically. Pension payouts will also be tax-free, and businesses can deduct equipment costs fully. The government plans to cut spending to reduce borrowing and ease the tax burden.#money254 #MoneyManagement #Per
@money254hq 𝐍𝐞𝐭 𝐏𝐚𝐲 𝐟𝐨𝐫 𝐒𝐨𝐦𝐞 𝐄𝐦𝐩𝐥𝐨𝐲𝐞𝐝 𝐊𝐞𝐧𝐲𝐚𝐧𝐬 𝐭𝐨 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞 𝐀𝐟𝐭𝐞𝐫 𝐍𝐞𝐰 𝐃𝐢𝐫𝐞𝐜𝐭𝐢𝐯𝐞 Starting July 2025, salaried Kenyans could take home more pay as employe... See more
That’s a wrap for this week’s Money Weekly!
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Tony and the Money254 editorial team.
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