CGT was introduced in Kenya in 1975 and suspended on 13 June 1985 – when Kenya was seeking to spur growth in the mining sector, real estate market and deepening local participation in capital markets. These hitherto distant aims appear to have been realized with the Nairobi Securities Exchange (NSE) consistently being ranked among the top five bourses in Africa and the robust growth and returns witnessed in the real estate sector which has been cited as a significant pillar of economic growth particularly over the last decade.
The Finance Act 2014 amended the Eighth Schedule of the Income Tax Act ("ITA") and as a consequence, CGT was reintroduced with effect from 1 January 2015. The reintroduction of the capital gains tax regime in Kenya is expected to widen the tax net and increase tax revenue collection for the government. In addition, from a regional integration perspective, the reintroduction of CGT is seen as a step towards bridging the differences in fiscal and tax policies between the East African States by aligning Kenya to its neighboring countries that impose tax on capital gains...Read more