11/05/2026
Finance Bill 2026- Key Highlights
Via Kimari Williams
On Rental Tax - Residential income tax to be increased from 7.5% to 10%.
On Mitumba/Second hand clothes - the bill deems profit at 5% of customs value payable. When subjected to 30% for corporate tax and graduated tax rates for individuals respectively, importation tax payable for companies will be 1.5% and 1% for individuals.
On Mobile phones - 25% excise duty proposed, up from 10% previously.
On Income Tax filing - the deadline is proposed to move from June 30th (6 months) to April 30th(4 months), with deadline for nil returns being 31st of January to the following year.
On Tax Amnesty - Upon payment of principal taxes, there will be an amnesty on interest and penalties for liabilities up to December 31, 2025. The amnesty expires on December 31, 2026.
On Digital and platform-based financial services - There's a proposed charge of VAT on digital and platform based financial services. The target is Fintech and the digital economy.
On calculation of timelines for objections and appeals - the change is from working days previously to calendar days. This is likely to shorten the timelines for appeals and objections.
On betting - The bill seeks to reinstate the withholding taxes on winnings at the rate of 20% for all.
On Scrap metals - the bill seeks to introduce withholding taxes in sale of scrap metals at 1.5% for all.
On input VAT - to the commissioner will have the power to recover input VAT on unsold supplies in cases of tax rates change.
On non-residents willing to open accounts with investment banks - the requirement to first obtain a KRA pin when opening accounts with such banks will be removed. The aim is to make the Kenyan capital market attractive to foreign investors.
Missing: Afore promised review to lower the Pay as You Earn (PAYE) taxes to shield salaried earners of below Ksh 50,000 from higher taxes. The bill is silent on such tax changes.
NOTE: These are currently proposals at the Bill Stage. They will be debated and passed by the National Assembly and assented to by the president before becoming effective.
