Introduction

The Kenya Finance Bill, 2026 was released on 30^th April 2026. These are proposals at this stage and will only become effective once passed into an Act, which is expected on or before 30^th June 2026.

In our latest newsletter, we provide an overview of the proposed amendments across several tax laws and highlight their potential implications to help you plan ahead and remain compliant.

Highlights of the key proposed changes include:

• Introduction of a tax amnesty for liabilities relating to periods up to 31^st December 2025, with the amnesty expiring on 31^st December 2026
• Introduction of withholding tax on interchange fees, merchant service fees and payment to card companies following the recent ruling by the Supreme Court that such fees are not subject to withholding tax
• Change in the due date for filing income tax return for both individuals and companies from 6 months after the end of year of income to 4 months after the end of year of income. Nil returns will be due by end of the first month after the end of year of income
• Introduction of income tax on importation of second-hand clothing and similar items at an effective implied rate of 1.5% of the customs value
• Increase in the tax rate for monthly rental income from 7.5% to 10%
• Reversal of the calculation of timelines for objections and appeals from working days to calendar days
• Introduction of Commissioner’s power to recover input VAT claimed in respect of unsold supplies upon change of rate
• Proposed charge of VAT on digital and platform-based financial services
• Proposed increase in VAT-free threshold for accompanied baggage for returning passengers
• Exemption of non-residents from the requirement to obtain a PIN when opening an account with an investment bank

Caveat

This newsletter has been prepared by RSM (Eastern Africa) Consulting Ltd, and the views are those of the firm, independent of its directors, employees and associates. This newsletter is for general guidance, and does not constitute professional advice. Accordingly, RSM (Eastern Africa) Consulting Ltd, its directors, employees, associates and its agents accept no liability for the consequences of anyone acting, or refraining from acting, in reliance on the information contained herein or for any decision based on it. No part of the newsletter may be reproduced or published without prior written consent. RSM (Eastern Africa) Consulting Ltd is a member firm of RSM, a worldwide network of accounting and consulting firms. RSM does not offer professional services in its own name and each member firm of RSM is a legally separate and independent national firm.