On 26 June 2023, the Kenyan president signed the finance bill 2023. The bill was published on 28th April 2023 and tabled in Parliament for the first reading on 4 th May 2023. The Parliament passed the bill on 14 June 2023.
Tax proposals under the bill:
- Reduce corporate rate on non-residents from 37.5% to 30% for fairness.
- Exempt manufacturers of human vaccines from withholding taxes on royalties, and interest paid to non-residents.
- Introduction of digital asset tax at 3% of the value of digital asset transferred or exchanged for fairness in taxation.
- Introduce withholding tax on payments made to residents in respect to sales promotion, marketing and advertising services at a rate of 5 percent on the gross amount.
- Various transfer pricing changes, including changes to the definitions of “related party” and “ultimate parent company” for country-by-country (CbC) reporting purposes.
- Exclusion from the interest deduction restriction rules for loans from domestic lenders.
