The government is offering you tax reductions. Here they are. Use them.

📋 1. The 2026 Tax Amnesty: clear your penalties (100%)

KRA reintroduced a tax amnesty programme from 1 July to 31 December 2026 . It waives 100% of penalties, interest and fines on debts incurred before 1 January 2026, if you pay the principal . Bonus: if you've already cleared your principal, the waiver is automatic . Previous amnesties helped KRA recover Sh80.9 billion in principal . A Sh100,000 debt + Sh50,000 in penalties becomes Sh100,000. Log into iTax. Check your arrears. Pay before December.

🏗️ 2. Real estate and housing: direct relief

The Finance Act 2026 offers mortgage interest relief of up to KES 360,000 on CBK-approved loans for building, purchasing or improving an occupied house . Full tax exemption on pension benefits paid to dependants after a contributor's death . And Capital Gains Tax exemption on property transfers into REITs .

💼 3. Hiring graduate apprentices: 50% tax rebate

Employers are eligible for a tax rebate equal to 50% of salaries paid to graduate apprentices . Conditions: written permission from the Industrial Training Authority Director-General, a registered apprenticeship contract, completion certification, and quarterly reports to KRA . You train talent and reduce your tax base.

🌱 4. Donations to approved charities

Donations to KRA-approved charitable organisations are deductible from your taxable income, as long as they don't create a tax loss . Companies building at least 100 affordable housing units per year qualify for a reduced 15% corporate tax rate . Verify that your beneficiary is KRA-approved.

🔋 5. VAT exemptions: clean energy, transport and agriculture

The Finance Act 2026 extended VAT exemptions : solar and lithium-ion batteries, electric buses and bicycles, bioethanol cooking solutions, sugarcane transport from farms to mills, and animal feed inputs. If you invest in these sectors, you don't pay VAT.

Tip: Business expense deductions (rent, utilities, salaries, marketing, repairs) are deductible if they are "wholly and exclusively incurred in the production of income" . Keep accurate records: invoices, receipts, bank statements, M-Pesa .

Do it now: Log into iTax. Check your historical tax debts. If you have arrears, pay the principal before 31 December 2026. One hour today could save you tens of thousands of shillings.

Sources: KRA – Tax Amnesty Programme 2026; Regfollower – Finance Act 2026 Analysis; Lexology – Finance Act 2026 Kenya; Manwa Advocates – SME Tax Reduction Guide 2025; Bizna Kenya – KRA Amnesty Benefits for SMEs.

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