The Kenya Revenue Authority has announced the applicable market and deemed interest rates for the final quarter of 2025, outlining the corresponding withholding tax obligations for employers under the Income Tax Act.
The Kenya Revenue Authority (KRA) has set the Market Interest Rate at 8% for the purposes of Fringe Benefit Tax under Section 12B of the Income Tax Act. This rate will apply for October, November, and December 2025.
Similarly, for Deemed Interest under Section 16(2)(ja) of the Income Tax Act, the prescribed interest rate is also 8% for the same period.
Employers are required to deduct 15% withholding tax on the deemed interest and remit it to the Commissioner within five working days.
This announcement was made by KRA 21 October 2025.
Earlier, KRA released a public notice on 10 July 2025 regarding updates to the market interest rate for fringe benefit tax and the deemed interest rate on specific non-resident loans.
