On 9 April 2024, the Kenya Revenue Authority (KRA) released a notice concerning the market interest rate for fringe benefit taxation and the deemed interest rate for specific loans from non-residents for the months of April 2024, May 2024, and June 2024. The market interest rates have been increased to 16%, from the previous rate of 15% for the preceding three months.
Fringe Benefit Tax
For the purposes of Section 12B of the Income Tax Act, the Market Interest Rate is 16%. This rate shall be applicable for the three months of April, May, and June 2024.
Deemed Interest Rate
For purposes of section 16(2) (ja) of the Income Tax Act, the prescribed rate of interest is 16%. This rate is applicable for the months of April, May, and June 2024.
The withholding tax rate of 15% on the deemed interest shall be deducted and paid to the Commissioner by the 20th day of the month following the month of computation.
On 22 January 2024, the KRA increased the market interest rate for fringe benefit tax purposes and the deemed interest rate for non-resident loans for January, February, and March 2024 from 13% to 15% for the previous three months.
