Global Daily Tax News, Kenya Enacts 2025 Finance Act, (Jul 9, 2025)

The Kenyan Government has enacted legislation for the implementation of pledges made in the nation's 2025 Budget.

In the Budget, the Government announced plans to offer advance pricing agreements, confirmed the payment deadline for tax under the minimum top-up tax regime for large multinationals, and announced concessionary corporate tax rates for certain companies.

The Finance Act confirms that tax under the minimum top-up tax regime, introduced through the Tax Laws (Amendment) Act, 2024, will be due by the end of the 14th month after the relevant tax period.

The Budget further included a series of tax incentive measures for companies established in the Nairobi International Financial Centre.

Other measures announced in the Budget include proposals to clarify that all gratuity payments, whether from public or private sources, are exempt from tax; to lower the digital asset tax rate from three percent to 1.5 percent; and to provide that mortgage interest expense deductions will be available also for mortgages secured for the construction of residential houses.

The Finance Act provides for the insertion of Section 18F into the Income Tax Act, providing for the implementation of an advance pricing agreement program. The Act provides that APAs granted by Kenyan authorities will be valid for a maximum period of five years. The Act says regulations will be issued to further clarify rules under the program.