Concerns are growing over Kenya’s proposed Finance Bill, 2026, following warnings that some of its provisions could breach regional trade agreements and expose the country to economic retaliation.
Principal Secretary Dr. Caroline Karugu has cautioned the National Assembly’s Finance Committee that elements within the bill risk undermining existing regional treaties. She warned that failure to align the proposed measures with East African Community (EAC) frameworks could trigger serious trade disputes.
“I have cautioned the National Assembly’s financial committee that some provisions in the proposed Finance Bill, 2026 risk undermining regional treaties and triggering heavy trade retaliation against Kenyan exports,” Karugu stated.
At the centre of the concerns is the proposed excise duty structure, which may conflict with EAC legal instruments governing trade among member states. According to Karugu, such inconsistencies could result in Kenya being flagged for discriminatory practices within the regional bloc.
“The EAC market accounts for more than 29% of Kenya’s total annual exports. Failure to align the current excise duty tax to the regional legal instruments risks being flagged as discriminatory and as a significant contributor to non-tariff barriers (NTBs),” she added.
The EAC remains a vital market for Kenyan exports, supporting key sectors such as manufacturing, agriculture, and cross-border trade. Any disruption to this relationship could have far-reaching economic consequences.
Experts warn that non-tariff barriers, including discriminatory taxation and regulatory misalignment, often lead to retaliatory actions by partner states. These may include additional levies, import restrictions, or administrative hurdles that can significantly slow down trade.
