Spotlight: Softening Tax Collections from Land and Share Deals
Recent reports highlight an emerging challenge facing the Kenya Revenue Authority (KRA): tax revenues from land transactions and private share deals are under pressure due to rising legal disputes on capital gains tax (CGT) timing and applicability. What’s Driving the Disputes? The core contention lies in when CGT becomes payable. KRA insists tax is due when full payment is made, irrespective of when contracts were signed or registered. Taxpayers counter that liability arises when the sale contract is executed, and payment occurs—not during later administrative formalities such as registration or stamping. This divide intensified after the January 2023 CGT rate hike from 5% to 15%, with taxpayers disputing KRA’s retrospective application of the new rate to transactions spanning that period. Court Ruling Update: Haria v Commissioner of Domestic Taxes (2025) A pivotal High Court ruling sided with taxpayers, affirming that CGT triggers at the point of sale and payment, not re...