LSK Puts Govt on Notice Over Finance Act 2026, Warns of Court Action Against ‘Administrative Overreach’

NAIROBI, Kenya, Jul 2-The Law Society of Kenya (LSK) has placed the government on notice over the implementation of the Finance Act 2026, warning that it will not hesitate to challenge in court any administrative actions that violate constitutional principles or unfairly burden Kenyans.

Speaking a day after the legislation officially came into force, LSK President Charles Kanjama said the society would closely monitor the rollout of the new tax measures, particularly provisions affecting digital services, withholding taxes and compliance obligations for businesses and taxpayers.

While acknowledging that the Act seeks to expand the country’s tax base and improve revenue collection, Kanjama cautioned that implementation must remain consistent with the Constitution and protect the public from arbitrary administrative decisions.

“The Finance Act 2026 officially took effect yesterday, and the LSK remains highly vigilant regarding its implementation across all sectors. While the legislation aims to broaden the national tax base, its far-reaching provisions on digital services, withholding taxes and compliance timelines must be balanced against economic fairness,” he said.

“Our Council will keenly monitor how these new fiscal measures impact ordinary citizens and the business environment. We stand ready to challenge any administrative overreach that compromises public interest or constitutional equity.”

His remarks signal the possibility of fresh legal challenges should state agencies exceed their mandate while enforcing the new tax law.

The Finance Act 2026 was signed into law by President William Ruto at State House, Nairobi, following its approval by the National Assembly, paving the way for the implementation of the Sh4.82 trillion national budget for the 2026/2027 financial year.

President Ruto has defended the legislation, saying it is intended to strengthen tax administration by sealing loopholes, improving compliance and enhancing fairness within the tax system rather than introducing broad-based tax increases.

“The signing of the Act consolidates our efforts to strengthen revenue mobilisation and ensure efficiency in tax administration,” the President said.

The Bill was passed by the National Assembly on June 18 after a closely watched vote in which 122 MPs supported the legislation while 40 opposed it.

A total of 186 MPs were absent during the vote, including Kiharu MP Ndindi Nyoro, one of the Bill’s outspoken critics.

The President also dismissed concerns that the law introduces new taxes on land, mobile money transactions, informal traders or essential locally manufactured goods, describing such claims as misinformation.

“Contrary to propaganda, misinformation, disinformation and fake news, the government did not propose any taxes that were largely alleged. Specifically, there was no proposal to introduce taxes on freehold land or any land for that matter,” he said.

According to the Head of State, the Finance Act, together with the Appropriation Act, provides the fiscal framework needed to fund government programmes, support key sectors such as agriculture and manufacturing, and advance the Bottom-Up Economic Transformation Agenda.