Capital gains tax—the income tax payable on the gain/profit made on the sale (disposal) of a capital asset—was introduced in Kenya in 1975 but suspended on 13 June 1985, when Kenya was seeking to spur growth in the mining sector and the real estate market as well as deepening local participation in capital markets. The Finance Act 2014 re-introduced a capital gains tax in Kenya, with an effective date of 1 January 2015.
The re-introduction of the capital gains tax regime in Kenya has been expected to increase tax revenue collection for the government. In addition, from a regional integration perspective, the re-introduction of the capital gains tax is seen as a step towards bridging the differences in fiscal and tax policies among East African countries by aligning Kenya to its neighboring countries that impose tax on capital gains.
Read a 2016 report [PDF 842 KB] prepared by the KPMG member firm in Kenya: Accounting for Capital Gains Tax in Kenya
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