The Kenya Revenue Authority fixed the market interest rate at 8% for fringe benefit tax and deemed interest on specific non-resident loans for the July–September 2026 quarter, effective 8 July 2026, with a 15% withholding tax on deemed interest payable within 5 working days; the low interest benefit rate under Section 5(2A) of the Income Tax Act also rises to 8% through 31 December 2026.

RF Report

The Kenya Revenue Authority (KRA) released a public notice on 8 July 2026  regarding updates to the market interest rate for fringe benefit tax and the deemed interest rate on specific non-resident loans for July, August, and September 2026.

Fringe benefit tax

For the purposes of Section 12B of the Income Tax Act, the Market Interest Rate is 8%.  This rate shall be applicable for the three months of July, August, and September 2026.

Deemed interest rate 

For purposes of Section 16(2) (ja) of the Income Tax Act, the prescribed rate of interest is 8%. This rate is applicable for the months of July, August, and September 2026.

The withholding tax rate of 15% on the deemed interest shall be deducted and paid to the Commissioner within 5 working days.

Low interest benefit

For purposes of Section 5(2A) of the Income Tax Act, the prescribed rate of interest is 8%. This rate is applicable for the months of July, August, September, October, November, and December 2026.

Earlier, the KRA revised market interest rates for fringe benefit tax and the deemed interest rate on specific non-resident loans on 15 May 2026.