Kenya’s Cabinet Secretary for National Treasury and Economic Planning, John Mbad,i has presented the Finance Bill 2025 before the National Assembly on 30 April 2025.
The government says it has not introduced any new taxes in the Finance Bill 2025, and the latest Bill is aimed at reducing the high cost of living. Mbadi stated the government is implementing measures to provide more relief to taxpayers, planning to cut KSH 130 billion from the KSH 4.3 trillion budget.
The Treasury also announced changes to the Income Tax Act, VAT Act, Excise Duty Act, and Tax Procedures Act.
The Finance Bill 2025 also includes new advance pricing agreement rules for non-residents with a permanent establishment in Kenya.
The bill’s text is not yet public, but reported measures include:
Small business deductions
A 100% deduction on expenses for tools and equipment purchased by small businesses.
Crypto tax rate reduction
A tax reduction on digital assets from 3% to 1.5%, applied to income from transfers or exchanges.
Minimum top-up tax
A new rule has been proposed requiring a minimum top-up tax to be paid within four months after the year-end.
VAT changes
- The VAT status of several supplies, including raw materials provided to pharmaceutical manufacturers, has shifted from zero-rated to exempt.
- An extension for the Kenya Revenue Authority (KRA) to review VAT refunds, from 90 to 120 days.
Export and investment promotion levy reduction
A cut in the export and investment promotion levy from 17.5% to 5% for some construction products.
Earlier, the Cabinet approved the Finance Bill 2025 on 29 April 2025.
