Analysis of the Tax Changes Proposed by the Finance Bill, 2026

• Expansion of the tax base and new taxing points: introduction or expansion of taxes across multiple sectors affecting card payment networks, interchange fees, scrap metal transactions, lottery winnings, non-resident rental income, expanded excise coverage on telecommunication devices and the withdrawal of selected VAT and income tax exemptions have been proposed;
• Expansion of source-based taxation of non-residents and cross-border transactions: non-resident rental income tax, and a proposed substantial widening of Kenya’s offshore capital gains tax framework;
• Acceleration of compliance and enforcement timelines: accelerated payment and filing timelines, including shortened income tax return deadlines from 6 months after the financial year end to 4 months, and in some cases, within 1 month of the year end, together with enhanced compliance requirements across multiple tax heads;
• Structural reforms to the tax framework: introduction of a simplified trust taxation framework and the introduction of a consolidated anti-avoidance regime under the Tax Procedures Act; and
• Targeted reliefs and incentives: reintroduction of tax amnesty measures, incentives relating to public-private partnership infrastructure projects, exemptions for transfers of property to a real estate investment trust and certain employee-related reliefs.

Click here to download the analysis of proposed tax changes under the Finance Bill, 2026.