The ruling limits loss carryforwards, applying to losses from 1 July 2025 onward and retrospectively disallowing deductions for losses before the 2020 income year.
The Kenya Revenue Authority (KRA) issued a private ruling on 1 September 2025 regarding the five-year limit on loss carryforwards under the Finance Act 2025, which took effect on 1 July 2025.
The ruling states that the carryforward restriction applies both to losses incurred from 1 July 2025 and retrospectively to earlier losses before 1 July 2025. This means losses before the income year 2020 cannot be deducted.
For the 2025 assessment year, only losses incurred from 2020 to 2024 are usable.
Private rulings are not generally binding, and the KRA’s position could be challenged.
Kenya’s President William Ruto signed the Finance Act 2025 into law on 26 June 2025.
