On the Lounge - Finance Bill 2026 Debate with CPA Virginia and Aquenita Ogolla.

Added: 2026-05-31

[00:00:06]All right, welcome back. And when we are seated, you know, it's about to get done on matters uh entrepreneurship. And today it's something different. Uh we have a tax expert mind and we also have a youth mind and we are going to be exploring the finance bill, how it is affecting us and you know the role of social media and all this amplifying the voices and all that. So with me in studio is or are very beautiful ladies who are going to help us d deeper into that. We've al we've all been championing here having women in STEM and you know in this technical courses today we are having women who deal with numbers and they'll be helping us understand the numbers. Allow me have the guest in studio introduce themselves to you back at home. Let's begin with you CPA.

[00:00:52]Thank you very much. Uh my name is CPA Virginia Kamo from KKC East Africa. uh KKC West Africa in a brief is an audit firm where we offer audit and advisory.

[00:01:04]We offer accounting and outsource uh accounting. We also have uh one department under tax and of course we also have the secretarial bit of it and uh in my capacity I work as a tax manager at uh at the firm and uh it's a pleasure to be here to discuss matters to do with tax. Thank you.

[00:01:28]>> My name is Aquina.

[00:01:31]I am a finalist accounting at Kenyata University. I'm also au um the member of finance students of Kenyata University.

[00:01:39]It's a pleasure to be here to share my perspective on how the youths view the finance bill.

[00:01:43]>> Karim Busan. Now let's just begin on that note. Before we get to the finance bill, CPA, there's always a a a mindset that is always mostly around business people, especially those who are starting up ignoring a number of things. Like for example, when you talk to someone who's beginning a business and you tell them that do you know do you know of ETMS? Do you how do you file your returns? How do you do this and this? Most of them either don't know about it or are ignorant about it. So from your perspective, what do you think is the biggest mistake that most people make uh in terms of the simple knowledge of understanding how to file their returns? You know, just general knowledge of taxes, especially for business people, the common mistake they make, >> right? Thank you for that question. And uh yeah, it is true. uh most of the business people as they start off their businesses they might not be lacking some information to do a lot to do with tax and basically it's not because they are ignorance or something it is because the information is not out there to them to consume it so uh what I would say is that uh there is much need for the government and the revenue authority to make more sensitization in terms of taxes for those uh business persons who are just coming up with ideas of uh starting off businesses and what they anticipate in the uh tax environment and of course being compliant in as much as they are starting on their business they need to comply and also uh pay uh pay a fair share of their taxes. So uh I would say it's much of um government sitization more particularly the issue just mentioned on its is just a thing that started uh some few years ago >> but still up to date we have several of them who do not know what this uh animal of eatings is. And so it's a matter of uh education and uh sensitization uh to be able to let the business person uh get to understand what it is about.

[00:03:54]>> Yeah.

[00:03:54]>> And and at what point does it catch up with the businesses?

[00:03:59]It is it gets at a point of uh I would say uh invoicing because as much as you're into business you have customers whom you are transacting with and also you have customers and suppliers whom you are transacting with. So it start at the point of making a sale. That is when you need uh to be able to raise itms and all that. And of course uh for your end when you you're getting a purchase you also get to be invoiced by your supplier and at that point I would say during the transaction.

[00:04:32]>> Yeah. All right. Because I've heard this going on around so much that you know uh you might be having a good company but then you will miss deals because you know you something to like you're on the table with K and something like that. And it's a conversation that most of us really don't know until you're now it like oh uh there was a scenario or there was a time when taxpayers or business persons were being flagged out I would say they were put under special table uh whereby you find that uh the element of special table came about through the missing traders. You find that there are some uh business persons who are perpetrating to be out for trade or for business but in sense want to evade taxoicing or having a company that do not exist but invoicing another company that do exist just for for purposes of reducing uh VAT uh taxes. And so uh it brought the issue of the Kenya revenue authority uh blacklisting those companies the nonexisting traders or the missing traders. If you're invoicing but you cannot declare your sales >> meaning you are you are out doing business not knowingly or rather you're not out to public or to the record of the taxpayer or the taxman. And so uh it brought the issue of uh uh being special table and of course once you are in the special table you cannot issue any teams and also uh you're not able uh to allow your suppliers or your customer claim that invoice and of course it has been an issue because uh once you're in the special table you can't get the tax compliance certificate you can't tender and so it has been an issue uh because uh it has brought those who are missing the missing traders and genuine uh business persons who also are out there and paying their taxes but still they are being blacklisted. So uh there's a time I think some few months ago uh the revenue also released um a public notice uh stating that anyone who has been listed uh mistakenly listed at the special table to be released because it was really causing a business person losing out tenders losing out businesses because of that uh issue of special table. But glad because uh several of them are being lifted. But now who whoever is remaining at the special table meaning it seems that they are either not in the tax man's record as they are just as missing traders.

[00:07:19]>> Right.

[00:07:20]>> Yeah.

[00:07:20]>> All right. Now aate from where you sit do you think uh uh CPA is talking about the government's role or the government's part in sensitization education and all that? So from a student perspective uh do you think that our curriculum uh with uh all the workshops that uh campuses have do you think that as education sector it is doing enough to ensure that uh fresh from campus you get to the job market knowing what is going on like the connection between classwork and reality.

[00:07:56]From my perspective, I feel like the the educational system is lagging behind in regards to financial literacy because when you are in school, we are being trained to go to the outside world into the job market. But when you in the job market, it's all about finances. You might find that someone is going to get their first job. They have no knowledge on financial literacy. They have little knowledge, not totally no knowledge, but they have little knowledge on financial literacy. have little they have little to start with but they don't know how to budget with this little >> because they're constantly on survival mode. So education in Kenya in as much as it's trying to incorporate financial literacy through the clubs like in the FKU we learn about financial literacy but what about those students who they don't have the capacity to join the clubs or they're not in a position to even actively participate in the clubs.

[00:08:48]So we find that they miss out on this in as much as the education system is trying but they we are still lagging behind on literacy because that is where we are going that is where we headed we have to learn financial literacy for us to even understand the finance bill for us to even understand how the economy is headed where the economy is headed starts from financial literacy so financial literacy is a foundation but we are lacking it >> currently setup has so many small businesses what's the approach that uh young people especially Now that you're around KU and there's KM market or there also businesses within campus >> uh what is their approach towards payment of taxes or their attitude towards payment of tax?

[00:09:31]>> If I majority of people when we talk about taxes our mind jumps into the government wants to take our money because we have knowledge about taxes but then we don't know the right channels on where the taxes are headed.

[00:09:47]We feel like the government just wants to take our money. For the small businesses, we have knowledge of personally I'm a business person.

[00:09:54]>> I have the knowledge of tax but then I feel like what I have is too little to share with the government but then again I also want to see that the systems are working and for the systems to work I also have to pay taxes.

[00:10:07]>> Yeah. So for the small businesses we know how to pay taxes but then we feel like what we have is so little to share with the government. We feel like the small entrepreneurs really we really struggling because as a small entrepreneur the income is not as consistent as it should be because my target clients are the students >> and the students they don't have a regular source of income. So in as much as I'd really want to pay taxes and other any other small business person in as much as we'd really want to pay taxes we feel like what we're getting is too little.

[00:10:43]>> Yeah.

[00:10:43]>> Okay. Did you take part in uh public participation of the finance bill?

[00:10:47]>> No, I didn't.

[00:10:49]>> Yeah. Yeah. All right. Now, the the 2026 2027 finance bill or finance act that is currently under you know public participation amendment and all that is uh meant to you know increase the tax bracket you know taxes and all that. uh you've mentioned something interesting that okay you didn't say but uh for your small business you say that you're earning too little and you feel it's too little to share with the government the current finance bill this is of course according to what the CS says that it's targeting those people mostly those who are binging t tax taxes and he has constantly mentioned uh those in consulting firms and all that uh who are making he g he gave an example of someone making 100,000 in 2 days and is does not uh is not taxed compared to someone who is making that 100,000 in 2 months who is taxed uh almost 30% of that amount. So from a perspective CPM this finance bill 2020 uh 2026 2027 uh for systems to work of course we need to uh collect tax. What do you think is a green flag or a red flag on this finance bill uh as far as uh managing the country is concerned?

[00:12:13]All right. Thank you for that. Uh what I feel is that just to take you back before I answer that is that uh the government is trying to collect taxes uh from both the small traders and the big traders uh through the element of digitization and uh we we spoke about the ITMS. it is trying to bring on board everyone to be able to pay taxes. And uh one of the thing that uh this finance bill is bringing is uh the taxation of starting from the small uh trader as uh my colleague has said here uh the small business traders she said that she's uh a business person and but she's feels that uh it is less she has less to share with the government. But you see now the proposal what the finance bill 226 is bringing is we need to or or bring her on board to pay taxes in in as much as she's earning less uh we need her to come and pay taxes. How the finance bill is coming through the element of um digital taxation like you earn your small revenue through digital but then you need to pay uh that taxes or on that income that you're earning. However, um many youth or the small trader I'll call them uh who are starting to uh to start up their businesses are earning their income through digital uh marketplaces uh creation of content uh making online sales but they have not been able to pay taxes but then the government is bringing them on board through the digital taxation and that is one of the outcry that uh we even myself are not into it in this uh finance bill that we do not agree to that and um let the young uh who are not employed try to earn a living from the digital content without uh being or suffering from taxation. Let those who are doing business, stable business uh do pay tax.

[00:14:22]But that person who is very young into this uh business industry or trying to earn a living in small content creation uh let them be and uh maybe once they trade uh to a certain threshold that is when they can start paying taxes. Uh so that is one of the I I would complete a red flag in this finance bill which needs to be acted. I did uh give my own uh I did participate in the in this and it is one of the class I I said I would want to have it removed.

[00:14:57]>> Uh another another thing um the taxation of digital uh digital taxation. Yeah.

[00:15:05]Another thing is that uh in as much as the government tries to uh collect more taxes through uh um having uh digitization it's digitization is one of the pillar through the Kerry the Kerry has got some pillars and one of it is digitization and we brought again the element of uh itms uh to try to c and bring or to collect more taxes through that because we said you cannot uh uh transact or do business right now without issuing its is one of the way of uh transmitting a sale or reporting to the revenue authority telling them look I have already made a sale of this amount in as much as it is less we don't have any capping for that so um it is one of the thing that we see uh the government needs to improve on to be able to bring on board or rather uh to give the an unemployed uh persons to be able to earn a living and of course uh to improve on the the their livelihoods.

[00:16:13]>> Mhm.

[00:16:13]>> Let's take the argument of Mi who says that most people who are complaining about taxes they actually those people who are evetting taxes and if not the ones who are aing taxes they're the ones who don't pay taxes at all. Uh he say that someone who uh is filing new returns is making more noise than someone who is actually paying taxes.

[00:16:33]And um uh according to what um this is according to the government is that the the public servant has been overburdened by payment of taxes because most of the country's economy is or our revenue collection is from majorly uh the public servants from the taxes you know right now there are so many cutting up to I think 30% >> of your revenue. So what the government is trying to do is trying to get those people who are not paying taxes to begin paying taxes because uh history has it for us that those people who are at the lowest level >> of earnings and those people who are at the highest level of earning are the ones who pay least taxes. Okay, that's according to the percentage that they give that those people who are at the highest bracket are supposed to be paying more than those who actually are on the middle class who are actually paying more um based on uh the structures that are already there in place. It's easy to get money from them because you can just go to the employer and you know this is happening. But those who are doing big businesses are the ones mostly who are evading taxes.

[00:17:44]So is it right to to say that the government is uh not fair trying to get those who are not paying taxes to begin paying taxes?

[00:17:54]>> Okay. Uh to start with I would say it is equally fair for everyone to pay their fair share of their taxes. However, uh the argument that those who are evading tax or who are not paying tax are the most loudest in this uh I would say the reason why it is so is because the taxes that are being collected from those who are paying taxes they are not the government cannot account for it or rather it is there's no accountability there is no economic development from whatever we are getting. So you find yourself and ask yourself if at all you already have some taxes from those who are paying taxes and you want more from us but we can't see uh the benefit of whatever you have then why do you have to go and tax the small trader or that person who is down there just concentrate on those big the big fish who are who are out there. So uh the element of accountability and uh uh showing what you have really done the development is a key concern to answer that. Uh the other thing is to mention uh the element of the those who are earning high are paying less and those who are earning less are paying high taxes. uh to start with um uh employees uh I would say they are the major uh tax contributors in Kenya I would say because if you can count the the the rate at which an employee pays it could go up to 40% if we start from the highest which is 32.5 we go uh AHL 1.5 we go she 2.7% if you add all that I would say majority of the taxpayers are the employees. However, this um is done on a graduated scale. So you find a majority of the staffs or the employees in Kenya uh ranges their average monthly income ranges from I would say 100 to 300.

[00:20:02]And you see we have a rate for that a graduated scale. We start from 10 up to the highest. If you're earning more than 800, you are the highest uh you have the highest uh rate of uh the bracket or the the the percentage. If you're earning um 28,000 and uh up to let's say 28,000, you start paying 10,000, we move on to 25,000. Those who are earning 100 uh,000 in a month, you see. So it's graduated.

[00:20:33]You can't say like uh those who are earning less they are they they are paying more or and those who are earning uh more they are paying less. It's it's all in graduate scale. It's the the issue here is uh the accountability in as much as you are getting taxes from shift. Yeah. What are you doing with this amount of money? You're doing uh you're getting taxes from AHL. What uh have we seen the government doing on this?

[00:21:01]>> Mhm.

[00:21:02]>> Yeah. It's all about accountability and uh uh economic stability on what you have already gotten in a particular financial year.

[00:21:12]>> That's deep.

[00:21:13]>> Now going back to you, what do you consider to be your red flags and green flags in this finance space?

[00:21:20]>> Okay. My I will start with the red flags to explain on the red flags. you find that actually annually around 800,000 plus graduates are released into the job market. Majority of them they will not land into a job automatically when they get out of school. And when they have the one thing that they're going to start from is hustling. When they're hustling, they can use the social media platforms. When they're hustling, they do majority of the online jobs like on online writing so that they can sustain a living. And you find that in the finance bill the clause that is mentioned is the social media the social the digital tax >> the digital tax this is someone who it's when they're starting they haven't even built a financial foundation for themselves and the government wants to tax them and as much as we really want to contribute in the economy as the youths to help into the growth of the economy we have so little. If you attack someone who they've just you're taxing them and they're just starting, it means they have little for themselves because they don't even they don't even know where to start from. This is just something that is helping them maneuver through life after campus. So the red flag is this the digital tax the digital tax for the youths. It's it's quite unfair for the youths.

[00:22:44]>> Should it be reduced? Uh should the percentage be reduced or should it be scrapped altogether?

[00:22:50]>> Either can do the percentage can be reduced or it can be scrapped off completely. But as long as the the young people and the youths they're being catered for in the finance bill and they're being considered >> in the finance bill because they don't have much to figure out life with.

[00:23:05]>> All right.

[00:23:05]>> Yeah.

[00:23:06]>> Your green flag.

[00:23:07]>> My green flag is the fact that the finance bill everyone is now involved in the finance bill. actually the young people they're involved in the finance bill. There's more involvement and our opinions are actually being brought on the table for consideration.

[00:23:22]>> Yeah, that at what point do you think that um tax laws turn from being uh developmental to now being punitive?

[00:23:32]>> Tax laws they the shift comes in when the tax laws target people who they have less income. Mhm.

[00:23:40]>> People who have less income, just like she has mentioned, people who have less income, they're already straining. So if you're putting a lot of tax, there's a lot of tax pressure on them, they don't have much.

[00:23:52]>> They don't have much. Yeah.

[00:23:54]>> All right. All right. Now, CP, I'd love for you to answer the same question.

[00:23:58]When does tax laws turn from being developmental to being punitive?

[00:24:05]>> Okay. I would say it's uh the point where you find you you're expecting the the startups company or businesses to be in the same industry or to pay the same taxes as uh those who have been there for many years. They have been uh transacting, they have been trading and you expect the same corporate tax rate at that percent uh to be able to to pay taxes on that. Instead what the government should uh uh embrace is that for startups we can get uh tax holiday uh we can get tax holiday uh for startups maybe those who are have just started the f first year up to the fifth year we get a tax holiday there's no taxes on that however now it's the opposite of that yeah you're expecting you start your business right now and you pay corporate tax the same way uh a person who started their year uh trading many years ago. We are in the same uh uh tax bracket 30% corporate tax.

[00:25:12]>> Mhm.

[00:25:13]>> Yeah. Uh that that is uh my opinion on that and uh still on the same the highest contributors of our revenue apart from those in the formal sector who are having you know continuous salary that is taxed by you know they have the procedures. Now there is those in the manufacturing industry, those in the you know oil, gas. Um they the among the heavy lifters of the economy.

[00:25:42]>> Uh they complain of being targeted a lot in this finance bill. Yesterday they really complained a lot uh of the taxes that are involved. How then should the government uh address having all of them contribute to our revenue? what kind of measures should be uh uh imposed on them?

[00:26:04]>> Uh okay. Uh what the government could uh do to assist on that maybe to give tax incentives. We normally have uh various tax incentives like I would mention to a company that is transacting or trading under the EPZ. they normally have some incentives >> uh when you start up your company for the first 10 years uh under the EPZ or the uh SEZ mostly under the EPZ you you have a tax holiday as I I had mentioned however those who are trading as um SCZ the special economics uh uh zone they have uh some benefits that they get from there so uh what I would and maybe propose or uh hope to uh have in future for those manufacturers who are in the oil uh gas and all that. Maybe to get uh an incentive from the government to be able to reduce on taxes because we see they are the major contributors of the e economy as you mentioned. And so for them to be able to run and also to be faithful to paying their taxes and also uh to be able to be at par and uh in their normal operation, they need something to uh incentive also uh to be able to even be able to even in as much as they making the they're paying their taxes, they have uh they're enjoying even uh being compliant uh because they have the incentives from the government.

[00:27:36]>> All right. Yeah.

[00:27:37]>> All right. Now, as we bring this to an end, let me begin with closing remarks from >> our lady here. Um there's the the the psychological part of it that comes with the finance bill all the time like uh anything we we we we just move with the motions and most of the time uh finance bill is supposed to be a okay not finance bill entirely but uh paying payment of taxes should be uh something that we are driven to pay uh based on uh you know we want to move our country forward. word blah blah blah and those all patriotic stories that you told but now there is more of outrage than uh financial uh conversations around it. What do you think is the cause of it and how should we overcome it as a people?

[00:28:30]>> Okay, let's start with the cause of the outrage.

[00:28:34]Statistics says it that majority like around 38% of the taxpayers they live below the poverty line. And this outrage comes in whereby the finance bill or the tax they're targeting the basic the essentials >> things like food, things like transport, things like rent. And you find that someone who is living below the poverty line, they're already straining to even get food. They're straining to even get rent. that's training to get rent to and from work. And then you find that with with the strengths around this and the tax also is now imposed on the essentials. That is where the outrage comes from because I feel like I'm already straining and the tax is already targeting the essentials. I don't even have I'm living from uh hand to mouth. I have to go to work. I have to pay transport to go to work so that I can afford to even pay that tax. I have to go to work so that I can even afford afford food.

[00:29:34]>> So I find that that outrage comes in from the the insufficiency of the poverty. We already living below the poverty line and it's it's affecting us directly. The people who are living below the poverty line it's affecting them directly. And um how can we go about this? We can go about this by there's this thing of tax equity. The people who are already earning more they need to be taxed more.

[00:30:00]people who are earning less they need to be taxed less so that they don't feel like there's already they straining and the government is also making them strain even more yeah >> all right thank you so much CPA as we continue this many Kenyans say that the attacks at every stage at every step is that a reality or it's just an exaggeration >> I would answer that through one saying from Wilson Churchill they say that you cannot tax yourself to prosperity and uh saying that uh with this finance bill I would mention that each and every year we normally have a finance bill coming through and the purpose of uh the finance bill is to try the the government tries to uh collect more revenue to be able to uh uh consider or to manage the uh public debt. However, one of the conon and taxation is um consistency or rather certinity. But you find ourself in here in Kenya after 6 months we have another finance bill changing things that were changed one year or two years ago. There's no consistency. M >> so you cannot you cannot give or uh assertain or give a prediction that in this coming years I need to plan myself because I have to pay this and this taxes this amount of taxes because uh the laws are changing year in year out and uh we need to have consistency.

[00:31:34]Yeah. For you to be able to know and plan yourself as a business person as an as an employee is how much am I going to pay in the next one or two years?

[00:31:43]>> Mhm. just because we have uh the cannon of taxation of consistency >> but we are lacking that.

[00:31:51]>> So we can say just to to to to to conclude is that uh uh the government in as much as we are trying to collect revenue and also to manage the public debt. We need consistency at least maybe to say in a in a year's time we sleep one year we see how we we are going to manage the debt through the the policies that have been set in that particular financial year and like having uh policies being drawn year in year out.

[00:32:22]Uh you mix taxes this this year you are taxing this you're next year you are removing it from this uh rate through this rate. Element of consistency is key and also certinity.

[00:32:35]>> Yeah.

[00:32:36]>> All right. Thank you so much CPA Virginia.

[00:32:38]>> Thank you >> and for making time for us. It's a big conversations that we can talk about it the whole day. The finance bill is like the new politics of our country.

[00:32:47]>> Sure.

[00:32:48]>> All right. Now that is on finance bill and how it is affecting us as young people and how it's affecting generally uh Kenyans as a whole. So coming up next we'll be having Faith from BudgetHub.

[00:33:01]We'll be getting deeper into uh the budgeting of uh in relation to the finance bill and how sustainable that is for our country. So stay tuned for that discussion coming up after the break.