Dar es Salaam (administrative capital)
Dodoma (legislative capital)
947,300 sq km
English common law; judicial review of legislative acts limited to matters of interpretation.
Personal Income Tax | Local & Expatriate
The Individual income is subjected to tax referred to as Pay As You Earn (PAYE). PAYE is computed based on a graduated scale.
This is applicable to both resident and non-resident individuals. For the expatriates, it is mandatory that they remit PAYE on any income accrued or derived in Kenya.
|The graduated scale for PAYE is as shown below;
Corporate Income Tax
Any income that is derived or deemed to have been accrued in Kenya is subject to corporate tax.
|The applicable rate is as follows:
Withholding tax is an agency tax that is applicable on different services at the point of payment..
|The applicable rate for professional fees is 5% and 20% for both resident and non-resident entities. Interest is taxed at the rate of 15% for both resident and non-resident Dividends is taxed at the rate if 5% and 15% for resident and non- resident entities. Management fees is taxed at the rate of 5% and 20% for resident and non-resident entities
Capital Gains Tax
|Capital Gains Tax is a final tax that is applied proceeds from the transfer of property.
|The applicable rate is 5%.
There is no environmental levy. However, acquiring the Environmental Impact Assessment License remains mandatory by the law.
|Dividends include any benefit (cash or non-cash) that is extended to the owner of a business or a related party to the owner.
|Dividends are subject to Withholding tax at the rate of 5% and 15% for both residents and non-residents respectively.
VAT is a consumption tax that is charged on the supply of taxable goods in Kenya and services and on importation into the country.
|Taxable supplies are subjected to VAT at a standard rate of 16% and 0%, except for fuels which are at the rate of 8%.
Bilateral Tax Treaties and DTAAs
|Kenya has entered into double tax avoidance agreements with several countries, such as South Africa, Zambia, United Kingdom, Denmark, Mauritius, India etc.
These DTAAs clearly highlight its beneficiaries and the taxes applicable between the two states. Within the terms, the agreement also allocates the taxing rights to the relevant country.
|In the cases where residents of a country that has a DTA with Kenya, (contracting state), transact with residents from Kenya, then the tax rates provided under the DTAAs shall prevail.
Where there is no a tax treaty between the contracting states, then the taxes as per the jurisdictional regulations shall be applicable.
|The Income Tax Act entails different tax incentives provisions that the taxpayers can take advantage of in order to reduce their liability while computing for their tax obligations.
Tax Rulings and Directives
|Tax disputes are limited to the ruling of the Tax Appeal Tribunals. However, taxpayers can appeal their litigations at the High Court on matters of legal interpretations.
Tanzania has achieved high growth rates based on its vast natural resource wealth and tourism with GDP growth averaging 6%-7% per year. The country has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining.
The economy depends on agriculture, which accounts for slightly less than one-quarter of GDP and employs about 65% of the workforce, although gold production in recent years has increased to about 35% of exports.
All land in Tanzania is owned by the government, which can lease land for up to 99 years. Proposed reforms to allow for land ownership, particularly foreign land ownership, remain unpopular.
The financial sector in Tanzania has expanded in recent years and foreign-owned banks account for about 48% of the banking industry’s total assets. Banking reforms have helped increase private-sector growth and investment.
The government elected in 2015 developed an ambitious development agenda focused on creating a better business environment through improved infrastructure, access to financing, and education progress, but implementing budgets remains challenging for the government.