RWK Financial Compass

  Kenya Breweries Limited (KBL) has successfully overturned a Sh486 million tax demand by the Kenya Revenue Authority (KRA) following a four-year legal battle. The Tax Appeals Tribunal ruled in favour of KBL on March 21, 2025, finding that the tax assessment was incorrect and excessive. The dispute stemmed from KRA’s classification of fermented apple fruit concentrate, a raw material used in producing KBL’s Tusker Cider, as a finished alcoholic beverage subject to higher import duties. The tribunal determined that KBL had provided sufficient evidence to prove that the concentrate was a raw material, not a finished product, and was therefore eligible for excise duty relief. This ruling aligns with previous decisions, including a 2022 High Court judgment affirming the tribunal’s classification of apple concentrate under tariff code 2106.90.20, which attracts a lower duty rate of 10%.

  The Kenya Revenue Authority (KRA) has recently inaugurated three trade facilitation hubs in Kainuk, Lodwar, and Kakuma, aiming to enhance cargo transit efficiency and bolster regional trade along the Northern Corridor. This strategic initiative seeks to improve trade facilitation and compliance, unlock business opportunities in Turkana County, and reinforce Kenya's position as a hub for international and regional trade. These new centers are expected to alleviate congestion at the Malaba and Busia border posts and significantly reduce transit times for cargo moving from Mombasa to South Sudan. By hosting KRA staff, including the Rapid Response Unit and Enforcement teams, the facilities aim to ensure the safe movement of goods, addressing challenges such as robberies, smuggling, and cargo dumping along the corridor. Dr. Lilian Nyawanda, KRA's Commissioner for Customs and Border Control, emphasized that the primary objective of these centres is to provide legitimate trade-r...

  KRA Targets SMEs with New Tax Compliance Measures The Kenya Revenue Authority (KRA) has intensified its focus on small and micro businesses with turnovers of KSh200 million or less. This effort is spearheaded by the newly established Department of Micro & Small Taxpayers, led by Acting Commissioner George Obell. The department, launched in March 2025, aims to combat tax evasion in the informal sector, which KRA identifies as a significant untapped revenue source. Key measures include targeting businesses filing nil returns or failing to file tax returns despite being operational.

The Kenya Revenue Authority (KRA) has introduced significant upgrades to its Electronic Tax Invoice Management System (eTIMS), aimed at simplifying tax compliance and enhancing user experience. These updates reflect KRA's commitment to leveraging technology for efficiency, flexibility, and accessibility for taxpayers.

  In a significant move to modernize tax administration and improve taxpayer satisfaction, the Kenya Revenue Authority (KRA) has initiated comprehensive organizational reforms. These reforms are strategically aligned with KRA's 9th Corporate Plan, which aims to create an agile and responsive tax framework.

  The Kenya Revenue Authority (KRA) is increasing its efforts to enforce compliance with the 1.5% Affordable Housing Levy, particularly targeting the informal sector. This move includes potential freezes on bank accounts and PINs for non-compliant traders. This newsletter provides an overview of the situation, potential implications, and recommendations for businesses and individuals in the informal sector. Affordable Housing Levy Act: The Affordable Housing Levy is a mandatory contribution, set at 1.5% of gross monthly salary for employees, with a matching contribution from employers. Individuals who are self-employed are also required to pay 1.5% of their gross income. The aim of the fund is to provide money for the design, development and maintenance of affordable housing, institutional housing and associated social and physical infrastructure. The Affordable Housing Act 2024 requires employers to deduct 1.5 percent of gross monthly pay to employees and...