In a notable shift from previous years, the 2025 Finance Bill unveiled by Treasury Cabinet Secretary John Mbadi introduces no major new taxes and instead proposes key exemptions aimed at easing the cost of doing business.
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Among the headline changes is the proposal to exempt packaging materials used for tea and coffee from Value Added Tax (VAT) a move expected to significantly reduce operational costs for exporters and manufacturers in the country’s vital agricultural sector.
“We are proposing to exempt packaging materials used for tea and coffee from VAT,”CS Mbadi stated during his presentation of the Bill to Parliament. “This measure is part of our effort to strengthen value chains and enhance competitiveness for Kenyan products on the global market.”
While economic policy shifts are typically driven by macroeconomic indicators, this year’s softer approach appears to have been influenced by a new and powerful voice: Kenya’s Gen Z.
From coordinated social media campaigns to in-person protests, the country’s digitally savvy youth have in recent years mounted increasing pressure on the government to abandon punitive tax proposals. In 2023 and 2024, efforts to introduce VAT on essential commodities and tax content creators were met with sharp, organized backlash much of it led by young Kenyans online.
“Gen Z has struck the fear of God into this government,” one Nairobi-based digital activist commented on X (formerly Twitter). “It can no longer afford to ignore our voice whether on TikTok, in the streets, or at the ballot.”
While the exemption on tea and coffee packaging has been welcomed by industry players and policy analysts alike, observers warn that the government’s newfound restraint could be strategic and temporary.
“We must remain vigilant,” said economist Dr. Janet Mwende. “There are still several proposals under review, and it’s possible that unpopular clauses could be reintroduced later in the legislative process.”
The Bill is now before Parliament for debate, and public participation forums are expected in the coming weeks. Activists, civil society, and youth organizations have vowed to scrutinize every line of the document.
For now, the government seems to have adopted a cautious tone in the 2025 Finance Bill avoiding the introduction of fresh taxes and offering modest but meaningful reliefs. Whether this marks a permanent change in fiscal policy or a temporary concession to mounting pressure remains to be seen. But one thing is clear: Kenya’s youth are not just online they are shaping national policy in real time.
