NAIROBI — The Kenyan government has taken a decisive step in tax reform by unveiling the Draft Income Tax (Minimum Top-Up Tax) Regulations, 2025, a framework aimed at ensuring multinational corporations operating in Kenya pay their fair share of tax. Kenyans+1
Under the proposed rules, multinational groups with annual turnover of at least €750 million (approx. KSh 96.9 billion) will be required to compute their effective tax rate in Kenya. If the rate falls below 15 %, they will face a top-up tax to bring them to the minimum threshold. Kenyans
Treasury Cabinet Secretary John Mbadi stated that the move aligns Kenya with the global OECD’s Base Erosion and Profit Shifting (BEPS) framework and is designed to curb profit-shifting and tax avoidance by large multinationals. Kenyans
✅ Why It Matters
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Large multinationals have long exploited loopholes to reduce taxable income in Kenya despite substantial local operations; these rules aim to eliminate that.
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By enforcing a minimum tax rate, Kenya seeks to bolster its revenue base — particularly critical given rising public debt and economic pressures.
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The draft regulations signal to international investors that Kenya is committed to transparent and fair tax practices, which may improve investor confidence.
⚠️ Risks & Considerations
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Multinationals may respond by limiting investment or shifting operations, which could slow growth or reduce employment in some sectors.
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The implementation of the regulations will require enhanced capacity at the Kenya Revenue Authority (KRA), and firms will need to prepare for increased compliance burdens.
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The public consultation period ends December 3 2025, meaning rules are still subject to change. Kenyans
🔍 What’s Next
The government will publish final versions of the regulations after the consultation period and integrate them into Kenya’s tax code. Firms will be expected to adjust their tax planning accordingly, and KRA will prepare enforcement mechanisms and guidelines for calculation of effective tax rates.
This move could mark a fundamental shift in Kenya’s tax-governance landscape, with long-term implications for corporate transparency, public finance, and economic equity.
