Kenya: Asset management services not VAT exempt; expenses not allocable to exempt income (Tax Appeals Tribunal decisions)
Asset management services did not constitute “insurance business” for purposes of VAT exemption.
The Tax Appeals Tribunal held in Waweru v. Commissioner (Tax Appeal No. E473 of 2025) [2026] that asset management services did not constitute “insurance business” for purposes of the value added tax (VAT) exemption appliable to insurance brokerage services, and thus were subject to VAT at the standard 16% rate.
Read a March 2026 report prepared by the KPMG member firm in Kenya
The Tax Appeals Tribunal also held in Prime Capital and Credit Limited v. Commissioner (Tribunal Appeal E101 of 2023) [2024] that the tax authority could not allocate general expenses of the taxpayer against the taxpayer’s exempt income, and thus disallow deductions for charitable donations made by the taxpayer, because the costs were not incurred in generating the exempt income. However, the tribunal upheld the tax authority’s assessment relating to unrealized foreign exchange loss and overstated unrealized exchange gain due to lack of supporting evidence from the taxpayer.
Read a March 2026 report prepared by the KPMG member firm in Kenya