Highlights of the Kenyan Finance Bill 2025

01.05.25 05:50 AM

By Eric Kihungu- Managing Partner

1. Income Tax Changes

  • Digital Content Creators: Income from online content (YouTube, TikTok, etc.) now taxable.

  • Trusts: Distributions to beneficiaries now taxable unless exempt (e.g., charitable).

  • Minimum Top-Up Tax: Multinationals taxed at minimum 15% in line with OECD GloBE rules.

  • Restructuring Exemptions: Capital Gains Tax exemption for intra-group transfers with no change in beneficial ownership.

2. VAT (Value Added Tax)

Removed Exemptions:

  1. Aircraft spare parts
  2. Solar equipment
  3. Medical diagnostic tools
  4. VAT on Digital Services:
  5. Non-resident digital suppliers must register and charge VAT.
  6. E-Invoicing (eTIMS): Mandatory for all businesses.

3. Excise Duty Adjustments

  Increased Rates on;

   1. Betting & gaming (on stakes)

  New Excise Items:

 1. Imported sugar

 2. Cooking oil

 3. Plastic packaging/products

4. Levies & Customs

 1. Export & Investment Promotion Levy: Applies to vehicles, cement clinker, etc.

 2. Higher IDF & RDL: Previously exempt inputs now taxed e.g machinery 

5. Tax Procedure & Compliance

 1. Withholding Tax Expansion: Digital marketing, tech & consultancy services now included.

 2. Faster Refund Process; Structured timelines and appeal framework.

 3. Digital Enforcement: More powers to KRA to pursue offshore service providers.

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