Kenya’s Finance Bill 2026 opens the door for the private sector to build public schools and reduce tax obligations under a provision tabled before the National Assembly on May 5, 2026.
The bill, published as Kenya Gazette Supplement No. 113 (National Assembly Bills No. 26), proposes that money spent on constructing a public school be treated as a deductible expense. This means the amount spent on building the school would be subtracted from a person’s or company’s income before tax is calculated, reducing the amount owed to the government.
The bill states that the deduction covers expenditure of a capital nature incurred during that year of income, with prior approval from the Cabinet Secretary, by a person undertaking the construction of a public school, hospital, road or any similar social infrastructure project.
There is, however, one condition attached. The individual or company must obtain approval from the Cabinet Secretary before beginning construction. Without that approval, the expenditure would not qualify for the deduction. The bill does not specify which Cabinet Secretary would be responsible for approving.
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Public schools are listed in the bill alongside hospitals, roads and other social infrastructure projects as qualifying developments under the proposed deduction. The bill uses the term “a person,” meaning both individual Kenyans and companies can benefit from the provision. No limit has been placed on the amount that can be deducted.
In practical terms, this means that a company that builds a public school in a given year can subtract the full construction cost from its income, lowering the portion of income on which tax is charged.
By Benedict Aoya
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