Tax Information

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Tax Information

Corporate Income Tax (CIT)

CIT is levied under The Income Tax Act (CAP 470); Revised Edition, 2021 as amended annually by the Finance Acts (currently, The Finance Act, 2023).  CIT is a tax charged for each year of income, upon all the income of a person whether resident or non-resident, which is accrued in or was derived from Kenya. CIT is paid in installments during the financial year based on the lower of 110% of the previous year’s liability or an estimate of the current year’s liability and is due on the 20th day of the fourth, sixth, ninth, and twelfth month of a company’s financial year. 

– CIT on resident companies is currently at 30%.
– CIT on resident subsidiaries of foreign companies is currently at 30%.
– CIT on resident registered branches of foreign companies is currently at 35%.

Withholding Tax (WHT)

WHT is deductible from certain classes of income at the point of making a payment, to non-employees.  WHT is creditable against CIT obligations for resident companies. For non-resident companies, WHT is a final tax.  WHT is payable to KRA on or before the 20th of the following month.

– WHT on consultancy fees is currently 5% for resident companies.
– WHT on agricultural income is currently 1% on gross monthly sales for resident companies.

Turnover Tax (ToT)

Turnover Tax(TOT) is a tax charged on gross sales of a business as per Sec. 12(c) of the Income Tax Act.  ToT is creditable against CIT obligations for resident companies.  ToT is payable to KRA on or before the 20th of the following month.

– ToT on agricultural income is currently at 1% charged on gross monthly sales for resident companies and individuals.

Value-added tax (VAT)

VAT is levied under the VAT Act, 2013, and the VAT Regulations, 2017.  VAT is payable to KRA on or before the 9th of the following month.

– The standard rate of VAT is currently at 16% on eligible supply of goods and services.
– Zero-rated for applicable supply of goods and services as per the Second Schedule to the VAT Act.
– Exempt for applicable supply of goods and services as per the First Schedule to VAT Act.

Note: More detailed and accurate tax information as well as details on how to pay and the applicable taxes and rates for SEZ/EPZ companies are available on the KRA website 

Introduction

Agriculture and related activities are the main source of income and 60 percent of employment for over 80 percent of Kenyans. The sector accounts for more than half of the country’s gross domestic product (GDP). The Government of Kenya (GoK) depends for about 45% of its revenue from this sector. Agriculture also makes up more than 50% of the country’s export earnings. Accordingly, the GoK has placed a great deal of importance and due attention to the development of agriculture in Kenya.

To address the growth and development challenges of the sector, the GoK has expressed a strong policy commitment to supporting the establishment of a public-private sector-led National Commodities Exchange (“the Exchange”). The Exchange will materially impact on the livelihoods of millions of Kenya’s smallholder producers and other actors, in both agricultural and non-agricultural commodity value chains, and the agricultural development led industrialization.

A transparent and efficient marketing system for key commodities in the country helped by the Exchange will have significant economic impact not only in terms of improving the export competitiveness of Kenyan commodities but also in stimulating domestic value addition and processing and other post-harvest activities. A marketing system that enables all actors to participate in a “level playing field” will further enable Kenya to achieve its goals of financial inclusion and support to less advantaged actors in the economy, particularly small-scale farmers and traders, largely operating in the informal economy.

A vibrant Exchange, powered by appropriate information and communications technology (ICT), will also strengthen the vision to place Kenya as an African, and potentially global, powerhouse in ICT. The Exchange shall be regulated by the Capital Markets Authority. A further ambition would be to ensure that a commodity exchange, while initially and primarily serving the needs of the Kenyan economy, evolves to potentially become a regional and continent-wide hub for the structured trading of commodities. The establishment of the Exchange in Kenya should finally be a private sector-led undertaking, with the concrete support and enabling environment provided by the public sector in various ways, such as policy and regulatory support, legal framework, and other measures.

The State Department of Trade, to lead the project for establishment of the Commodity Exchange in Kenya, has hired the Consultants to implement the framework of commodity exchange. A Task Force comprising representatives of relevant line ministries has been set up. It is thus envisaged that the Consultants will work on implementation of the Commodity Exchange in regular close interaction with the Taskforce.

Kenya Vision 2030is the country’s new development blueprint. It aims to transform Kenya into a new industrializing, “middle-income country providing a high quality life to all its citizens by the year 2030”. The adoption of the Vision by Kenya comes after the successful implementation of the Economic Recovery Strategy for Wealth and Employment Creation (ERS) which has seen the country’s economy back to rapid growth since 2002, when GDP grew from a low of 0.6% and rising gradually to 6.1% in 2006. The Vision 2030 is based on three “pillars”: the economic, the social and the political.