Despite the fierce criticism which greeted The Finance ACT 2023, Kenyans are yet to feel more pain as the government plans on implementing even more taxes.

The Finance Act 2023 was implemented in three phases: on 1st July 2023, 1st September 2023, and 1st January 2024.

The following are tax measures that came into effect at the start of 2024. Exactly how might they impact you? Fares and rent may soon be hiked.

Read on for details.

Items exempted from tax:

1. Investment income from a post-retirement medical fund, whether or not the fund is part of a retirement benefits scheme.


This will encourage the uptake of post-retirement medical covers, which is critical.

2. Royalties, interest, management fees, professional fees, training fees, consultancy fees, agency or contractual fees paid by a Special Economic Zone (SEZ) developer, operator or enterprise, in the first 10 years of its establishment, to a non-resident person.


This will incentivise foreign investors to put money into SEZs in Kenya which will then result in job creation.

3. Royalties and interest paid to a non-resident person by a company undertaking the manufacture of human vaccines.


This will attract medical experts into the country for manufacture of vaccines.

Changes in taxation:

1. Filing of Income Tax Returns

Any expenditure or loss shall NOT be deductible if the invoices of the transactions are not generated from electronic tax invoicing management (e-TIMS).


The government seeks to on-board more taxpayers and widen the tax base and those who previously offered services but paid no tax may increase prices to offset new costs.

2. Rate of advance tax reviewed

Increase in the advance tax for vans, pickup trucks, prime movers, trailers and lorries from KShs1,500 to KShs 2,500 per tonne of load capacity per year or KShs 5,000 per year whichever is higher.

The increase will also apply to saloons, station wagons, mini-buses, buses and coaches to KShs 100 per passenger capacity per month or KShs 5,000 per year whichever is higher.


Increase in cost of transport as the rise in tax is transferred to commuters, those in need of transportation.

3. Rental Income

Residential Rental income tax (MRI) rate reduced from 10% to 7.5%.


The govt is seeking to ensure tax compliance by landlords, but the overall impact may be an increase in rent that you pay.

4. Corporate Income Tax on Vaccines

Introduce Corporate Income Tax (CIT) rate of 10% for companies undertaking the manufacture of human vaccines. 


Standard rate of CIT is 30%. The much-reduced rate is to encourage manufacturers of human vaccines in the country which will hopefully result in lower healthcare costs.

5. Taxation of Repatriated Income for Non-residents

The Act introduces the taxation of repatriated income for non-residents with a permanent establishment in Kenya at a rate of 15% and reduce their Corporate Income Tax (CIT) rate to 30% from 37.5%.


Taxing repatriated income has the potential to influence businesses and individuals to re-invest rather than repatriate their income.

6. Taxation of employee share ownership plans offered by start-ups

There’ll be a 5-year tax reprieve for benefits generated where an employee is offered company shares as opposed to cash emoluments.


This is meant to encourage start-ups to offer shares to employees and make Kenya an attractive business destination for start-ups.

7. Interest on Mortgages

Individuals to claim mortgage interest expense to a maximum of KShs 300,000 per year incurred on money borrowed from a co-operative society.

8. WHT on Immovable Property

Withholding tax on payments for use of immovable property reduced from 10% to 7.5%. 

9. Cryptocurrencies (Effective date: 1st September 2023)

Introduced tax on the income derived from the transfer or exchange of digital assets (such as cryptocurrency transactions) at a rate of 3%.


Even though cyrptocurrency is not yet legal tender in Kenya, the government is aware that many dabble in the space and is seeking to loop them into paying taxes.

Worth noting:

Medium-term Revenue Strategy 2024/25 – 2026/27 indicates that the government will be rationalising personal tax reliefs. Hopefully the post-retirement medical relief will be spared.

Medium-term Revenue Strategy 2024/25 – 2026/27 indicates that the Treasury plans to harmonise the rental income tax rate with the Corporate Income Tax rate so the Residential Rental income tax reduction may be affected.