Kenya: Implementation of minimum tax

Kenya: Implementation of minimum tax

The minimum tax—introduced by the Finance Act, 2020 and effective 1 January 2021—seeks for each company registered and operating in Kenya to pay income tax regardless of whether it makes profit or not.


The minimum tax is implemented parallel to the normal corporation income tax and is charged at a rate of 1% of a company’s gross business revenue. Read TaxNewsFlash

It is possible that implementation of the minimum tax:

  • Could jeopardise the viability of many businesses based on their operating models (due to the COVID-19 pandemic)
  • Could face controversies owing to some deficiencies in provisions of the Finance Act, 2020 and overlooked business factors
  • Could “water down” capital allowances and therefore deter investments in Kenya
  • Could conflict with section 15(4) of the income tax law for low-margin businesses

Read an April 2021 report prepared by the KPMG member firm in Kenya

© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us