Event report

CEO Roundtable : "Kenya shifting Tax Landscape : risks,opportunities and strategic priorities for business leaders", with ALN Kenya

A high-level discussion on the fiscal, regulatory and enforcement trends reshaping Kenya’s tax landscape and their implications for businesses.

On Tuesday, 30 June 2026, the French Chamber of Commerce in Kenya, in partnership with ALN Kenya | Anjarwalla & Khanna, hosted an exclusive CEO Roundtable on “Kenya’s Shifting Tax Landscape: Risks, Opportunities and Strategic Priorities for Business Leaders” at ALN House.

Bringing together CEOs, CFOs and senior executives, the closed-door session provided a timely overview of the fiscal, regulatory and geopolitical developments expected to influence business operations in Kenya and across East Africa.

The discussion was led by members of ALN Kenya’s tax practice, who examined the recently enacted Finance Act 2026, Kenya’s wider fiscal outlook, emerging tax-dispute trends and the continued digitisation of tax administration.

Kenya’s fiscal outlook and rising tax pressure

The session opened with an overview of Kenya’s economic and fiscal position.

The speakers highlighted the continuing gap between government revenue and expenditure, as well as the pressure this places on the authorities to increase tax collection. Tax revenue remains the government’s principal source of income, making businesses a central part of the fiscal-consolidation strategy.

Participants discussed the need to balance three objectives:

• Raising sufficient revenue;

• Controlling public expenditure;

• Maintaining the country’s attractiveness to investors.

The speakers stressed that fiscal consolidation cannot rely exclusively on higher taxes. Sustainable progress will also require stronger expenditure controls, improved public procurement, better allocation of government resources and greater use of public-private partnerships.

Questions were also raised about the realism of revenue projections and whether the government’s targets sufficiently account for their potential impact on investment, growth and business confidence.

Finance Act 2026 and implementation timelines

The Finance Act 2026 was signed into law shortly before the session, with the majority of its provisions expected to take effect from 1 July 2026.

This made the discussion particularly relevant for companies required to review their systems, contracts, reporting procedures and internal tax controls within a limited period.

The speakers noted that the direction of tax policy is increasingly focused on:

• Broader tax bases;

• Stronger enforcement;

• Greater access to taxpayer information; 

• Technology-driven compliance;

• Reduced reliance on exemptions and incentives.

Business leaders were encouraged to identify the provisions directly affecting their operations and ensure that their finance, legal and tax teams were prepared for the implementation dates.

Investment competitiveness and foreign direct investment

A central theme of the roundtable was the relationship between tax policy and Kenya’s attractiveness as an investment destination.

Participants discussed whether increasing tax pressure, complex compliance requirements and frequent legislative changes could influence foreign direct investment decisions.

While Kenya remains an important regional business hub, the speakers noted that investors increasingly compare its tax environment with neighbouring markets. The consistency, simplicity and predictability of the tax system are therefore becoming as important as the headline tax rates themselves.

The discussion stressed that poorly designed provisions may generate limited short-term revenue while creating wider consequences for:

• Investment decisions; 

• Group restructuring; 

• Access to international capital; 

• Regional headquarters; 

• The cost of doing business.

Offshore share transfers and capital gains tax

One of the most significant concerns raised during the session related to the expanded taxation of offshore share transfers.

The Finance Act introduces broader capital gains tax implications where transactions involving foreign entities indirectly derive value from assets or businesses located in Kenya.

The speakers explained that these provisions could apply not only to external disposals, but also to certain group reorganisations and transfers between related entities.

Several practical concerns were highlighted:

• The potential taxation of transactions with only a limited connection to Kenya;

• Uncertainty over how gains should be calculated;

• Possible tax exposure on internal restructurings; 

• The obligation placed on non-resident sellers; 

• Difficulties surrounding enforcement and visibility; 

• The risk of double taxation in the absence of an applicable treaty.

The speakers warned that the provisions could cause international investors to reconsider how they structure or deploy capital in Kenya.

Kenya’s relatively limited double-tax treaty network may further increase this risk, particularly for investors operating from jurisdictions without effective treaty protection.

Participants noted that although concerns had been raised during the public-participation process, the provision had nevertheless been enacted. Its practical and commercial consequences are therefore expected to become clearer over the coming year.

Double-tax treaties and cross-border services

The session also reviewed recent tax disputes concerning cross-border professional and management fees.

The discussion focused on how such payments should be classified under double-tax agreements, particularly where a treaty does not contain a specific provision covering technical or professional services.

The speakers explained that the classification of income as business profits, management fees or other income can significantly affect where it is taxed.

They also highlighted the importance of:

• Confirming the tax residence of each entity;

• Assessing whether treaty-benefit conditions are satisfied; 

• Reviewing ownership structures; 

• Identifying where effective management and control are exercised; 

• Maintaining documentation supporting the adopted tax position.

Recent court decisions demonstrated that treaty protection cannot be assumed solely because two countries have signed a double-tax agreement. Companies must also satisfy the relevant residence, ownership and substance requirements.

Taxation of banking and payment services

Another area discussed was the expansion of taxation affecting banking, card-payment and payment-processing services.

The speakers referred to changes concerning management fees, interchange fees, merchant charges and other payments arising within banking and digital-payment systems.

These measures may increase the cost of transactions and could ultimately affect merchants and consumers, particularly in a market such as Kenya where electronic and mobile payments are widely used.

The session also highlighted the tension between legislative changes and previous court decisions. In some cases, tax provisions have been amended following lengthy litigation in which taxpayers had successfully challenged the revenue authority’s position.

Virtual assets and the digital economy

The Finance Act also introduces additional reporting and compliance measures relating to virtual assets.

Virtual-asset service providers are expected to provide greater information on transactions and users, reflecting a wider international move towards increased transparency in the crypto-asset sector.

The speakers noted that regulatory authorities are seeking greater visibility over:

• Crypto-asset trading; 

• Virtual-asset platforms; 

• User identification; 

• Cross-border transactions; 

• Income generated through digital assets.

These changes form part of a broader transition towards automatic information exchange and data-led tax enforcement.

Businesses involved in digital assets, financial technology or online platforms were encouraged to review the new reporting and licensing requirements carefully.

eTIMS, digitisation and data-led enforcement

A major practical concern for participants was the continued expansion of electronic tax administration through systems such as eTIMS.

The speakers acknowledged that digitisation can improve transparency and compliance. However, they also highlighted challenges businesses continue to encounter when system-generated data does not fully reflect their accounting records.

Examples discussed included:

• Payroll expenses; 

• Travel costs; 

• Foreign supplier invoices;

• Inventory timing;

• Accounting adjustments;

• Expenses not captured through electronic invoicing.

This creates a risk that the revenue authority may assess a company using incomplete or automatically generated information before the taxpayer has been able to make the necessary accounting adjustments.

Companies may therefore face temporary increases in taxable income or mismatches between reported revenue, costs and inventory.

The speakers stressed that tax compliance is no longer an annual filing exercise. It increasingly requires continuous reconciliation between accounting systems, invoicing platforms, payroll data and information already accessible to the Kenya Revenue Authority.

Tax disputes and documentation

The roundtable also highlighted the growing importance of documentation in tax disputes.

As KRA gains greater access to transactional and third-party data, businesses must be able to support their tax positions with clear, consistent and contemporaneous records.

This is particularly relevant in areas such as:

• Transfer pricing; 

• Management and professional fees;

• Related-party transactions;

• Offshore structures; 

• Tax residence; 

• Cross-border payments.

The speakers advised businesses to review their documentation before a dispute arises rather than attempting to reconstruct the supporting evidence during an audit or objection process.

Regional comparison with Tanzania

The discussion concluded with a comparison between developments in Kenya and Tanzania.

While Tanzania is also increasing the digitisation of its tax system, recent measures have included incentives intended to strengthen investor confidence.

Examples discussed included:

• Tax exemptions for approved strategic investments;

• Measures supporting priority sectors;

• Clearer procedures for tax refunds;

• Payment deadlines following approval of refund claims; 

• Possible interest where approved refunds are delayed.

Participants noted that these measures may improve cash flow and investment confidence, particularly in export-oriented and agricultural sectors.

The comparison reinforced the importance of maintaining a tax system that raises revenue while remaining competitive within the East African region.

Key takeaway for business leaders

The roundtable demonstrated that Kenya’s tax environment is becoming more digital, more transparent and more enforcement-driven.

For CEOs and senior executives, tax should therefore be treated as a strategic business issue rather than solely as a technical finance function.

Organisations should prioritise:

• Reviewing the Finance Act’s impact on their activities;

• Strengthening internal tax governance;

• Aligning tax, legal, finance and operational teams;

• Monitoring cross-border and restructuring risks;

• Improving documentation and system reconciliation;

• Assessing Kenya’s tax position within their wider regional strategy.

We warmly thank ALN Kenya | Anjarwalla & Khanna for hosting and leading this highly insightful discussion, our speakers Daniel Ngumy, Kenneth Njuguna, Brian Waruru, Faith Siteyia, Dennis Chiruba, Lucy Njau, and all participating business leaders for their valuable questions and contributions.