The Finance Act 2026, effective from July 1, has overhauled Kenya's taxation framework, introducing significant changes across multiple tax categories. This affects a wide range of taxpayers, from salaried employees and small traders to large corporations and multinational groups.

Key Taxes Kenyan Taxpayers Must Note in 2026

  • Corporate Income Tax (CIT): Standard rate for resident companies is 30%, with non-resident permanent establishments taxed at 37.5%. Newly listed companies on the Nairobi Securities Exchange enjoy a reduced rate of 27.5% for three years.
  • Minimum Top-Up Tax (Pillar Two): A 15% minimum tax applies to multinational groups with turnovers exceeding €750 million in two of the last four years.
  • Turnover Tax (TOT): Set at 1.5% on gross monthly sales for micro, small, and medium enterprises with annual turnover between KSh 1 million and KSh 25 million.
  • Capital Gains Tax (CGT): At 15%, this tax applies on net gains from transferring land, buildings, and unlisted securities in Kenya.
  • Digital Asset Tax (DAT): A 3% tax on transactions involving cryptocurrencies, tokens, NFTs, and similar assets.
  • Significant Economic Presence (SEP) Tax: Non-resident digital service providers without a physical presence in Kenya pay an effective 3% tax.
  • Value Added Tax (VAT): Standard rate remains at 16%, with zero-rated and exempt categories as defined by law. Registration is mandatory for businesses with turnover exceeding KSh 5 million.
  • Excise Duty: Levied variably on products including alcohol, tobacco, sugary drinks, cosmetics, telecoms, financial services, betting, vehicles, and virtual asset services.
  • Withholding Tax (WHT): Applied at source on specified income types, with rates varying by payment category.
  • Rental Income Tax: Residential rents attract a 7.5% tax on gross income for landlords earning between KSh 288,000 and KSh 15 million annually, while commercial rents are taxed under standard income tax rates.
  • Employment Taxes: PAYE rates range between 10% and 35%, alongside contributions to NSSF (6% each by employer and employee), SHIF (2.75% by employee), and AHL (1.5% each by employer and employee).
  • Instalment and Advance Tax: Instalment tax applies to businesses with tax liabilities over KSh 40,000, while commercial vehicle owners pay advance tax based on tonnage or seating capacity.
  • Stamp Duty: Property transfers incur 4% within municipalities and 2% outside; share transfers and share capital attract 1% each.
  • Customs Duty: Rates vary within the East African Community Common External Tariff from 0% to 35%. Kenya Association of Manufacturers members benefit from reduced Import Declaration Fee and Railway Development Levy rates at 1.5% each.
  • County-Level Taxes and Charges: These vary by county and include levies such as single business permits, cess, and land rates.

The Kenya Revenue Authority continues to administer these taxes through digital platforms like iTax and eTIMS, facilitating compliance and collection.