The Consumers Federation of Kenya (COFEK) has protested what it describes as the hurried passage of the Finance Bill, 2026, accusing Parliament of advancing far-reaching tax proposals without sufficient regard for consumer protection, privacy rights, public participation and fair administrative action as required under the Constitution.
The consumer lobby argues that lawmakers are in the final stages of approving measures that will fundamentally alter how Kenyans are taxed in their day-to-day transactions, yet critical concerns raised by consumers and other stakeholders have not been adequately addressed.
According to COFEK, the speed with which the Bill is being processed risks exposing millions of Kenyans to new tax burdens without proper safeguards against higher living costs, privacy violations and unfair administrative practices.
The federation contends that several provisions contained in the Bill are punitive and could disproportionately affect ordinary consumers, low-income households and small businesses already grappling with economic pressures.
Among the measures drawing the lobby’s opposition are proposed taxes on digital payment systems, virtual assets and scrap metal transactions, as well as the removal of VAT exemptions and zero-rated status for a number of essential goods and services.
COFEK argues that expanding taxes and charges on payment processing systems, card schemes and other financial infrastructure will inevitably increase operational costs for banks, fintech firms and payment service providers. Those additional costs, it says, are likely to be transferred directly to consumers through higher transaction fees and merchant charges.
The federation has also taken issue with the proposed 1.5 percent withholding tax on gross proceeds from scrap metal transactions, warning that taxing turnover rather than actual income could disproportionately hurt waste pickers, youth and small-scale traders who operate on extremely thin profit margins.
Further concerns have been raised over proposals allegedly to remove VAT exemptions and zero-rating on essential goods and services, including basic food items, health products, agricultural inputs and educational materials.
According to COFEK, subjecting such goods to the standard 16 percent VAT rate is likely to increase production and distribution costs, ultimately resulting in higher prices for consumers at a time when many households are struggling with the rising cost of living.
The lobby further faults the Bill for failing to provide a clear transition framework or targeted consumer protection measures to cushion Kenyans from the anticipated impact of the proposed tax changes.
It also argues that some provisions touching on digital transactions raise broader concerns about privacy and data protection in an increasingly digitized economy, warranting closer constitutional scrutiny before they are enacted.
It is against this backdrop that COFEK, led by Secretary-General Stephen Mutoro, has moved to the High Court in Milimani seeking conservatory orders to stop the enactment and implementation of the contested provisions pending the hearing and determination of a constitutional petition.
In court documents, the federation argues that once the impugned provisions take effect, the resulting constitutional injury to taxpayers and consumers could be immediate and difficult to reverse.
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