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16 December 2020

The December edition tax newsletter covering tax changes that take effect from 1 January 2021. 

The below is a snippet of what you can find on the downloadable file.


Sections of the Relevant Acts and Descriptions

Proposed Changes

Our Comments/Remarks

Effective Dates



Section 6A- Residential Rental Income Tax (MRI)

Increase  in  the  upper  income threshold from KES 10 million to KES  15  million  and  increase  (by double)    the    lower    threshold from KES 144,000 to KES 288,000

More landlords will fall under this simplified 10% tax regime and those earning less than KES 288,000 per annum (KES 24,000 per month) will be exempt. This is to align the exempt threshold of KES 24,000 per month granted to employees In formal employment.

01 January


Section 12(D) – Minimum Tax

This tax will be payable at 1% on gross revenue  on the 20th of the fourth, sixth, ninth and twelfth months by all persons regardless of whether they make profits or not. However, this tax will not apply to employment income, any exempt income, 10% residential rent income, turnover tax income, capital gains tax income and income of extractive sectors taxable under the 9th schedule.

This   goes   against   the   basic tenet of levying tax on profits rather     than     on     revenue. Government  projects  reduced taxes    owing    to    COVID-19 pandemic and thus has cast its net    wider    to    loss    making businesses   to   shore   up   its revenues.


Their main justification and argument  by KRA is that ALL must contribute to taxes for reason that they enjoy public services that are paid from taxes. However, for profit making companies, where the instalment tax payable is higher than the minimum tax, the later shall not apply.

01 January



Kindly click on the download button below to get more information on this.

Henry Sang, Tax Director |