Kenya: Tax measures in Finance Bill 2018 | KPMG Global
Share with your friends

Kenya: Tax measures in Finance Bill 2018

Kenya: Tax measures in Finance Bill 2018

Kenya’s Finance Bill, 2018 was published, following the budget statement for financial year 2018-2019.


Related content

Provisions of the legislation will be effective on different dates between 1 July 2018 and 1 January 2019.

The bill introduces a number of revenue-raising amendments to finance the government’s budget. Among the amendments are provisions concerning:

  • The introduction of a presumptive tax targeting the “informal sector” (this would repeal section 12C of the income tax law, that provides for a turnover tax of 3% on the gross receipts for persons with a turnover of less than KES 5 million and would replace it with a presumptive tax on persons whose turnover from business does not exceed KES 5 million per year, with the rate of tax set at 15% of the single business permit fee issued by county governments) 
  • Overhaul of the “compensating tax regime” (that is, the tax on dividends paid out of untaxed profits)
  • A tax on money transfers by banks 
  • Changes to the rates of value added tax (VAT) on certain goods and services
  • One-year extension of a tax amnesty program
  • A doubling of the late-payment interest charges 
  • Repeal of interest rate capping mechanism


Read a June 2018 report [PDF 1.19 MB] prepared by the KPMG member firm in Kenya

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in 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


Request for proposal