Global Daily Tax News, Kenya Maintains Tax-Related Interest Rates, (Oct 29, 2025)

The Kenya Revenue Authority has maintained the market interest rate for calculating the fringe benefit tax due on non-arm's length loans and the interest rate for related-party loans.

The KRA said, for the purposes of Section 12B of the Income Tax Act, the Market Interest Rate will be eight percent for the three months October, November, December 2025. Under Section 12B, an employer is required to withhold FBT where a loan is provided to an employee that bears an interest rate lower than the market interest rate.

The deemed rate of interest on interest-free loans between a resident company and non-resident connected entities is also eight percent. Tax should be withheld at a rate of 15 percent on the deemed interest and paid to the Commissioner within five working days.