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This article explains Kenya’s interest expense restriction under Section 16(2)(j) of the Income Tax Act, which limits the deductibility of interest paid to non‑resident lenders to 30% of EBITDA. It outlines the scope of the rule, exempt entities, the three‑year carry‑forward mechanism for excess interest, and the implications for businesses relying on foreign debt. The summary highlights how the cap affects tax liability, financing strategies, and cash‑flow planning, while underscoring the need for careful tax planning and compliance for companies operating in Kenya.

A tax dispute between Delmonte Kenya Limited and the Kenya Revenue Authority (KRA) arising from a transfer pricing audit for 2019–2021, resulting in confirmed additional income tax assessments of KES 4.96 billion. Key issues include the characterization of Delmonte’s functions, the transfer pricing method applied to related‑party sales to DMI GmbH, and the disallowance of intercompany recharges and interest expenses.

Kenya Revenue Authority’s move to validate income tax returns through e-TIMS marks a major policy shift from self-assessment to algorithmic oversight. This raises constitutional, legal, and taxpayer rights concerns, challenging the balance between digital transformation and established tax law.

New NSSF rates effective 1 February 2026. Employee and employer contributions remain at 6% each, but expanded Lower and Upper Earnings Limits increase monthly deductions. Includes historical rate changes, salary impact examples, and key action points for employers and employees.

The High Court of Kenya in Commissioner of Investigation & Enforcement v Hanqing Zhao (Income Tax Appeal E010 of 2025) ruled that tax objections must be lodged exclusively through the iTax system to be legally valid. Physical letters or emails are ineffective, and the statutory 60‑day response period under Section 51 of the Tax Procedures Act begins only once an objection is filed on iTax.

The High Court ruled that Sendy Ltd is the principal supplier for VAT purposes because it controls pricing, driver assignment, billing, and customer payments. As a result, VAT applies to the full transaction value, not just commissions. The decision overturns the TAT ruling and confirms that economic reality overrides contractual form, exposing digital platforms to significant VAT risk where they exercise substantive control.

Many organizations struggle with siloed budgeting, where Finance reconciles disconnected plans from Sales, HR, Operations, and Marketing—leading to delays, errors, and outdated forecasts. Integrated Budgeting and Forecasting, a core of Extended Planning and Analysis (xP&A), solves this by uniting all departments in a shared planning environment.

The Kenya Revenue Authority (KRA) initiated a compliance review on ICEA Lion General Insurance Ltd, demanding KES 122 million in corporation tax and KES 88.8 million in VAT for 2015–2018. While the corporation tax was settled, the Tax Appeals Tribunal (TAT) ruled that VAT is not chargeable on the disposal of salvage motor vehicles, as this activity is integral to insurance business and covered under the VAT exemption for insurance services. The ruling was based on principles of indemnity and subrogation. KRA has since appealed the decision at the High Court, and the outcome will determine future VAT treatment of salvage disposals in the insurance sector.

The Kenya Revenue Authority (KRA) has mandated all fuel stations to integrate with the eTIMS Fuel Station System by 30 June 2025, with enforcement beginning after 31 December 2025. The system enables real-time electronic invoicing, integrates with POS and forecourt controllers, and automatically populates VAT returns to reduce errors and streamline compliance. It supports mobile money, card payments, loyalty programs, and stock management, while ensuring offline invoicing for continuity. Non‑compliance may attract penalties and enforcement actions.

Kenya releases draft Income Tax (Advance Pricing Agreement) Regulations, 2025 for public consultation. Issued by KRA under Section 18G(5) of the Income Tax Act, the Regulations outline the framework for APAs effective 1 January 2026. Designed to reduce transfer pricing disputes, APAs align with OECD standards and BEPS Action 14. Stakeholders are invited to review and submit feedback.

This article analyzes the Nairobi Bottlers Limited v KRA case (Income Tax Appeal E079 of 2024), focusing on the application of Limitation of Benefits (LOB) under the Kenya–South Africa Double Taxation Agreement. It explores how ownership tests, treaty interpretation, and domestic tax law affect eligibility for DTA relief and refund claims. The High Court ruling sets a precedent for multinational tax compliance and cross-border payments in Kenya.

Discover how Kenya's High Court redefined fintech taxation in the landmark Pesapal v KRA case. The ruling exempts PSP commissions from VAT, overturns a Kshs. 76.8M assessment, and sets a precedent for clarity, competitiveness, and legal certainty in the fintech sector.

Kenya’s Standards Levy Order, 2025 (Legal Notice No. 89 of 2025) introduces major updates for manufacturers, effective 16 May 2025. Key changes include a shift in levy calculation from ex-factory price to customs value, expanded classifications of manufacturers, and new annual levy caps. The revised order clarifies obligations for industries such as textiles, construction, agriculture, and software development. Businesses must now pay 0.2% of customs value monthly, with exemptions and caps outlined for smaller manufacturers. Stay informed to ensure compliance with Kenya’s updated trade and industry regulations.

The Kenya Revenue Authority (KRA) has automated annual income tax filing for salaried individuals and nil filers, starting January 2025. Through the iTax system, taxpayers will benefit from pre-populated returns sourced from integrated government databases, reducing manual entry, filing errors, and penalties. This move reflects KRA’s commitment to digital transformation and data-driven compliance.

Kenya’s Finance Act 2025 introduces major tax relief for penalties and interest caused by electronic tax system errors. Taxpayers can now apply for waivers under Section 89 of the Tax Procedures Act, 2015, if liabilities arose from system glitches, registration mistakes, or update delays. Learn who qualifies, what’s excluded, and how to benefit from this long-awaited amendment.

Kenya’s VAT system imposes reverse VAT on imported services, requiring the recipient—not the foreign supplier—to account for and remit VAT. Under Section 10 of the VAT Act, imported services are taxed if supplied by a non-resident and would be taxable if provided locally. The standard rate of 16% applies, and payment is made via iTax using a PRN. Recent updates clarify that both registered and unregistered persons must comply, with VAT due at the earliest of invoice, payment, or service delivery.