The Kenya Finance Bill 2026, released on 30 April 2026, introduces a series of proposed amendments to various tax laws. These proposals are not yet law and will only take effect once enacted, expected on or before 30 June 2026.

The Bill reflects a continued shift in Kenya’s tax policy toward broader tax coverage, enhanced compliance, and increased use of digital systems in tax administration.

Key Proposed Changes Include

• Introduction of a tax amnesty for tax liabilities relating to periods up to 31 December 2025, with the amnesty window closing on 31 December 2026.
• Introduction of withholding tax on interchange fees, merchant service fees, and payments to card companies following clarification of their tax treatment.
• Reduction of income tax filing timelines from six months to four months after the end of the year of income, with nil returns due within one month after year-end.
• Introduction of income tax on importation of second-hand clothing and similar goods at an effective implied rate of 1.5% of customs value.
• Increase in the monthly rental income tax rate from 7.5% to 10%.
• Introduction of VAT on digital and platform-based financial services, alongside targeted VAT adjustments including input VAT recovery on unsold supplies following changes in VAT rates.
• Strengthening of tax administration through enhanced use of electronic tax systems, pre-populated returns, and automated compliance processes by the Kenya Revenue Authority.
• Revision of objection and appeal timelines from working days to calendar days, resulting in shorter dispute resolution periods.
• Expansion of reporting requirements for Virtual Asset Service Providers (VASPs) to enhance transparency in digital asset transactions.
• Exemption of non-residents from the requirement to obtain a KRA PIN when opening accounts with investment banks.

Download an Overview of the Kenyan Finance Act 2026 (PDF)