The Kenya Revenue Authority released a public notice on 8 April 2025 regarding updates to the market interest rate for fringe benefit tax and the deemed interest rate on specific non-resident loans.
Effective for April, May, and June 2025, the rate has been reduced from 13% to 9%.
Fringe benefit tax
For the purposes of Section 12B of the Income Tax Act, the Market Interest Rate is 9%. This rate shall be applicable for the three months of April, May and June 2025.
Deemed interest rate
For purposes of section 16(2)(ja) of the Income Tax Act, the prescribed interest rate is 9%. This rate is applicable for April, May and June 2025.
Withholding tax at 15% on the deemed interest shall be deducted and paid to the Commissioner within 5 working days.
Earlier, the Kenya Revenue Authority (KRA) revised market interest rates on 17 January 2025. Then, the fringe benefit tax and deemed interest rate for certain non-resident loans have been reduced to 13% for January to March 2025. The low-interest loan benefit rate is now 14%, down from 16%, for January to June 2025.
