Kenya: Tax proposals in Finance Bill 2025, including introduction of APAs
Changes would broaden the tax base and increase revenue collection
The Finance Bill 2025 proposes various tax amendments aimed at broadening the tax base and enhancing revenue collection, including:
- Expansion of significant economic presence (SEP) tax to businesses operating online
- Introduction of advanced pricing agreements (APAs) for cross-border transactions involving related parties
- Value added tax (VAT) exemptions for electric bicycles, inputs for animal feed manufacturing, and electric buses
- Increase in per diem benefit for personal income tax from KES 2,000 to KES 10,000
- Limiting the carry-forward period for corporate tax losses to five years
- Empowering the Commissioner to issue agency notices on tax disputes in court
Read a May 2025 report prepared by the KPMG member firm in Kenya