COFEK Moves to Court to Block Key Finance Bill 2026 Tax and KRA Powers
News Updated: 16 June 2026 15:57 EAT
Photo Courtesy
Consumer lobby group COFEK has moved to court seeking to block several provisions contained in the proposed Finance Bill 2026, escalating a growing legal and public dispute over the government’s tax reform agenda.
In the petition filed before the High Court, the federation challenges at least six clauses it argues would significantly expand the Kenya Revenue Authority’s enforcement powers and introduce new compliance burdens on individuals and businesses.
A key point of contention is the proposed 1.5 percent withholding tax on scrap metal transactions, which COFEK says could increase operational pressure on small-scale dealers and disrupt informal value chains in the recycling sector.
The lobby group also targets provisions linked to virtual asset regulation, particularly clauses requiring enhanced disclosure of user data and transaction records to tax authorities, which it argues could expose citizens to privacy risks.
Another disputed area involves expanded administrative authority for the tax agency, including broader access to third-party data and strengthened assessment mechanisms that allow more aggressive revenue estimation and enforcement.
COFEK further objects to proposed changes shortening tax return filing timelines, arguing that reduced compliance windows could disproportionately affect small and medium enterprises with limited accounting capacity.
The petition also raises concerns over what it describes as insufficient public participation during the drafting and review process of the Finance Bill, claiming that key stakeholder views were not adequately incorporated before publication.
According to the group, the contested provisions collectively tilt the tax system toward enforcement-heavy compliance rather than taxpayer facilitation, raising concerns about fairness and proportionality in fiscal policy design.
The organization argues that some clauses may also infringe on constitutional protections related to privacy, consumer rights, and administrative justice, particularly where digital financial data is involved.
On the economic front, COFEK warns that the scrap metal tax and virtual asset regulations could distort emerging markets and push some transactions into less regulated channels, undermining formal sector growth.
The government, through earlier submissions on the Finance Bill, has defended the reforms as necessary to widen the tax base, improve compliance, and modernize revenue collection in line with evolving digital and informal economies.
The case is expected to proceed for hearing in the coming weeks, with potential implications for the implementation timeline of the Finance Bill 2026 should the court grant interim orders or suspend any of the challenged provisions.
Tags: Editor's Pick Editors choice Signs Signs Media Signs Media Kenya Limited Signs Tv Signsmedia Signstv Signstvkenya Signsv Article News Article COFEK High Court World Consumer Rights Day
Share this article
FELIX MAKONA
FACT FINDER AND DATA DRIVEN JOURNALIST. DATA MINING AT IT'S BEST. GET FACTS RANGING FROM MATTERS DISABILITY AND INCLUSION, POLITICS, ECONOMY, SPORTS AND GENERAL NEWS AROUND THE WORLD