Africa's Finance Bill Wave: What Every SME Owner in Kenya, Nigeria, Ghana and Zambia Needs to Know in 2026

Introduction

In June 2024, something extraordinary happened in Nairobi. Thousands of young Kenyans, students, traders, gig workers, and small business owners stormed their country's Parliament. Not because of a war or a coup. Because of a tax bill.

Following widespread protests in which Parliament was stormed, President William Ruto rejected the Finance Bill 2024 and ordered a KSh 346 billion budget cut. "I concede and therefore I will not sign the 2024 finance bill and it shall subsequently be withdrawn," Ruto said in a televised address. "The people have spoken."

Young activists mobilised using social media platforms like X, TikTok, and Instagram. They circulated calls to action, translated the bill into several local languages, used ChatGPT to answer questions about the bill, and leaked the phone numbers of political leaders. It was one of the most remarkable citizen uprisings in African political history and it was triggered by a tax bill.

At least 65 protesters were killed by security forces in the 2024 Anti-Finance Bill protests in Kenya, according to the Kenya Human Rights Commission.

That moment sent shockwaves across the continent. In Nigeria, Ghana, and Zambia, citizens and business owners began paying much closer attention to what their governments were writing into law. And what followed in 2025 and into 2026 is arguably the most sweeping wave of tax reform Africa has seen in a generation.

Here is what actually happened country by country and what it means for your business.

Kenya: Listening to the Streets

After the dramatic withdrawal of the 2024 Finance Bill, Kenya's government returned with a very different approach. The Finance Act, 2025 was signed on 26 June 2025, revising multiple statutes including the Income Tax Act, VAT Act, Excise Duty Act, Tax Procedures Act, and Miscellaneous Fees and Levies Act, with most provisions effective from 1 July 2025.

The headline changes for small businesses were real and meaningful.

The threshold required for mandatory VAT registration was increased from KSh 5 million to KSh 8 million in annual turnover. This means thousands of small businesses are no longer required to register for VAT at all, removing one of the most administratively burdensome obligations that had weighed on micro-enterprises.

Employees will welcome the increase in the daily tax-free per diem allowance from KES 2,000 to KES 10,000, a move that reflects inflationary trends and boosts take-home pay for those who travel for work. For business owners managing staff costs, this is practical and immediate relief.

Start-ups also received attention. The Finance Act 2025 introduced a reduced corporate income tax rate for start-ups certified by the Nairobi International Financial Centre Authority— 15% for the first three years and 20% for the following four years.

On digital assets, the Act abolished the 3% tax on digital asset transactions, removing direct taxation on cryptocurrencies and non-fungible tokens.

But not everything eased. Tax losses can now only be carried forward for five years. Previously, a company could carry forward losses indefinitely. This means capital-intensive businesses which are unable to offset all their losses within five years will lose the relief from the tax burden. For founders building long-term ventures, particularly in manufacturing or infrastructure this is a significant tightening.

The amendments in the Act came into effect on 1 July 2025, with the exception of two provisions that came into force on 1 January 2026: the introduction of Advance Pricing Agreements and an amendment regarding the use of the Import Declaration Fee.

The overall signal from Nairobi is clear: a government that heard the public outcry and came back with reform rather than retreat more measured, more administrative, and broadly more protective of small businesses than what came before.

Nigeria: The Biggest Tax Reset in the Country's History

While Kenya was rewriting chapters, Nigeria tore up the entire book.

On 26 June 2025, President Bola Ahmed Tinubu signed the Nigeria Tax Act, 2025, along with three related bills: the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Administration Bill and the Joint Revenue Board (Establishment) Bill, collectively known as the Tax Reform Bills. These laws took effect from 1 January 2026.

The new regime consolidated multiple taxes previously scattered across over 60 disparate statutes into fewer than 10 clearly defined statutes, marking the most ambitious fiscal overhaul in Nigeria's history.

The most important change for most Nigerian small businesses is dramatic.

Small companies are now defined as those with annual gross turnovers of NGN 100 million, previously NGN 25 million and below, and total fixed assets not exceeding NGN 250 million. These businesses are now fully exempt from Companies Income Tax, Capital Gains Tax, and the newly introduced Development Levy.

That is a fourfold increase in the exemption threshold. Millions of Nigerian small businesses that previously had to file and pay Company Income Tax are now completely outside its scope.

The law also introduces a tax exemption for employees earning NGN 800,000 or less annually, approximately NGN 66,667 per month while applying progressive rates to higher income brackets, with the highest rate capped at 25%.

A single Development Levy of 4% on assessable profits has been introduced for companies above the small business threshold. This levy replaces multiple existing charges including the Tertiary Education Tax and the Police Trust Fund Levy, simplifying compliance for larger companies.

The reform also brings new compliance obligations. Banks are now required to disclose account information to the Nigeria Revenue Service when specific thresholds are exceeded — for individuals, this applies to accounts with quarterly turnovers above NGN 25 million, and for companies, the threshold is NGN 100 million quarterly.

For informal businesses operating in cash, the walls are closing in by design. The government is pushing formalisation hard, and the generous exemptions are the incentive to bring businesses inside the system voluntarily, before enforcement catches up.

Ghana: The E-Levy Is Gone and That Matters Enormously

If you run a business in Ghana and you use mobile money and almost everyone does, the most important date of 2025 was 2 April. That is the day the E-Levy died.

The announcement was made during the presentation of the 2025 Budget Statement by Finance Minister Dr. Cassiel Ato Forson on 11 March 2025, on behalf of President John Dramani Mahama. "We are committed to putting more money into the pockets of Ghanaians and improving disposable incomes. That is why we have decided to abolish these burdensome taxes that have become an albatross on the neck of households and businesses," Dr. Forson told Parliament.

The Electronic Transfer Levy (Repeal) Act, 2025 repealed the Electronic Transfer Levy Act, 2022, abolishing the 1% E-levy imposed on electronic financial transactions with effect from 2 April 2025. Mobile money transfers, covered bank transfers, and other electronic transactions are no longer subject to the E-levy.

The E-Levy had been deeply unpopular since its introduction in 2022 not only because of the cost, but because it actively discouraged mobile money adoption at a time when Ghana was trying to expand financial inclusion. Its removal is an immediate and tangible win for every trader, merchant, and freelancer whose daily operations run through a mobile money wallet.

The same package of reforms also abolished the 10% withholding tax on bet winnings and gaming, the 1.5% withholding tax on unprocessed gold from small-scale miners, and the Emissions Levy on vehicles and industries.

On VAT, Ghana is also moving. The government announced comprehensive VAT reforms aimed at eliminating distortions in the current system and reducing the effective tax burden on businesses and consumers, with a VAT Reform Task Force inaugurated and technical assistance requested from the IMF. Key parameters include abolishing the COVID-19 levy and raising the VAT registration threshold to exempt micro and small businesses from the collection obligation.

For Ghanaian SME owners, the direction of travel in 2025 and 2026 is encouraging: lower transaction costs, simplified compliance, and a government that appears to have learned the same lesson as Kenya.

Zambia: Tightening the System, Expanding the Base

Zambia took a different but equally significant approach, with reforms focused on formalisation and compliance infrastructure.

Following the 2025 Budget announcements, the turnover tax registration threshold was increased, with turnover tax now applying to businesses with an annual turnover of up to ZMW 5 million, previously ZMW 800,000 at a rate of 5%. This simplifies the tax regime for micro-businesses, keeping them within a straightforward turnover tax rather than the full VAT system.

However, the 2025 reforms also brought tougher compliance requirements. As of 1 January 2025, Zambia introduced an advance income tax of 15% on remittances and exports exceeding USD 2,000 or its equivalent for transactions made without a valid Tax Clearance Certificate. If your business moves money across borders or exports goods and you don't have your paperwork in order, this directly affects your cashflow.

From 1 January 2025, input tax claims are restricted to invoices issued from the Smart Invoice system or those issued by taxable suppliers exempted from using Smart Invoice. This is a critical change for VAT-registered businesses: if you're not using the Smart Invoice system and you claim input tax, you risk losing that right entirely a serious operational and cashflow risk.

Looking ahead, Zambia's 2026 National Budget, presented by Finance Minister Dr. Situmbeko Musokotwane on 26 September 2025, introduces a suite of tax and business reforms aimed at improving equity, simplifying compliance, and aligning Zambia with evolving global tax standards. The ZMW 253 billion budget represents a 17% increase from the initial 2025 budget, with domestic revenue collection targeted at 22.3% of GDP.

A study of SMEs in Lusaka's Central Business District found that 59% of respondents indicated a decrease in profitability as a result of the 2025 corporate tax reforms, alongside a rise in tax liability attributed to the reforms. The message from Zambian businesses is clear: the administrative burden of compliance is real, and government needs to continue investing in simplification and training.

What All of This Means for Your Business

Across Kenya, Nigeria, Ghana and Zambia, the direction is the same: African governments are broadening their tax bases, building digital compliance infrastructure, and using incentives to pull informal businesses into formal systems.

The businesses that will benefit most are those that act early. If you're a small business in Nigeria earning under NGN 100 million, make sure your records prove it, the exemption is only real if you can claim it. In Ghana, the removal of the E-Levy makes mobile money cheaper than it has been in three years; use it fully. In Kenya, check whether you still need to be VAT-registered under the new KSh 8 million threshold, many businesses no longer do. In Zambia, if you are VAT-registered and not yet using the Smart Invoice system, get on it now before you lose the ability to claim input tax.

The era of informal businesses operating in the shadows of Africa's tax systems is shortening, not because governments are hunting small businesses, but because the infrastructure to see them is finally being built. The good news is that in 2025 and 2026, each of these four governments has also extended real concessions to make formal membership worthwhile.

Finance bills used to be documents that accountants read. In 2024, a generation of Africans proved that they affect everyone and that ordinary people will fight back when they get it wrong. Governments have taken notice. The question now is whether small business owners across the continent are paying equally close attention to what those governments have written next.

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