Fwd: FW: EY Kenya - Latest tax alerts (June 2025)

[Erika Wanda]

Hi All

 

FYI

 

Regards

--

Erika Wanda | East Africa On-Site Technology Support Lead | EYTechnology   Ernst & Young LLP Kenya Re Towers, Upper Hill, Off Ragati Road, Kenya Office: +254-20-2886000 | Mobile: +254-724-618266 | Erika...@ke.ey.com Website: http://www.ey.com

From: Josephine W Kahinga <josephine...@ke.ey.com>
Sent: Wednesday, July 9, 2025 7:10 AM
To: D-D-P-EY_KE-Pers_All <D-D-P-EY_K...@ey.net>
Subject: EY Kenya - Latest tax alerts (June 2025)

 

Good afternoon team,

 

I trust that you are keeping well.

 

 

Dear Sir/Madam,

 

Please find on the body of the e-mail, summaries of our latest June 2025 tax alerts:

 

Tax alert 1 - Kenya accepts applications for the new Digital Nomad Permit

Tax alert 2 - Kenya Tax Appeals Tribunal offers a distinction between reimbursements and incidental costs for VAT purposes

Tax alert 3 - Mozambique announces new pre-travel registration requirement for visa-exempt foreign nationals

Tax alert 4 - Nigeria's Federal Inland Revenue Service rolls out e-invoicing platform

Tax alert 5 - Rwanda introduces numerous tax changes

Tax alert 6 - Digital Services Taxes and other Taxes on the Digital Economy Summary as of 1 June 2025

 

Tax alert 1:

 

Executive summary

• Effective April 2025, Kenya introduced the Class N: Digital Nomad permit for foreign nationals wishing to work remotely from within Kenya for a company located abroad. Applicants must meet specific requirements, including employment by a foreign company and proof of financial means.

 

• This initiative positions Kenya as a favorable destination for remote workers.

 

Tax alert 2:  

 

Executive summary

• Kenya Tax Appeals Tribunal ruled, on 21 March 2025, that staff costs incurred by a human resource outsourcing company were incidental to its core services.
• The staff costs incurred by the human resource outsourcing company were part of the company's taxable value and thus subject to VAT.
• The company had erred by failing to register for VAT, despite reaching the VAT registration threshold.
• Taxpayers engaged in similar transactions and business models may need to reexamine the structuring of their transactions and contractual obligations to address VAT supply valuation exposures.

 

Tax alert 3:  

 

Executive summary

Effective 24 April 2025, all visa-exempt foreign nationals traveling to Mozambique for business or tourism must complete an electronic pre-travel registration at least 48 hours prior to departure. This new requirement aims to enhance security and streamline the entry process for travelers, with penalties for non-compliance.

 

Tax alert 4:

 

Executive summary

• The Federal Inland Revenue Service held consultations with key stakeholders in March 2025 regarding the implementation of its new mandatory e-invoicing regime known as the Merchant Buyer Solution e-invoicing system, as part of its digital tax transformation strategy.
• The initial phase of the program, involving the largest taxpayers, should commence in July 2025 and proceed through December 2025. Thereafter, the program is expected to be rolled out to medium and small taxpayers.
• The portal may be accessed either directly or by integration via the Application Program Interface.
• The scope of the program encompasses all supply, and penalties apply for non-compliance.

 

Tax Alert 5:

 

Executive summary

• A government notice, published in the Gazette on 29 May 2025, amends various tax laws mainly focused on increase in taxes or levies; some of the changes became effective immediately.
• The capital gains tax rate will increase from 5% to 10%, effective from the date of gazettement, potentially affecting entities' investment strategies.
• A new 1.5% digital service tax will be imposed on companies providing digital services with substantial national presence, effective from the date of gazettement.
• A 3% tourism tax on accommodation services will take effect on 1 July 2025, requiring accommodation providers to adjust their pricing and tax remittance processes accordingly.
• Affected entities should prepare for increased excise duties on various goods, including a 15% duty on financial transactions and cosmetics, which will affect cost structures and pricing strategies across multiple sectors.

 

Tax Alert 6:

 

Executive summary

•           The tax alert provides information in summary form of digital services taxes and other taxes on the digital economy for 32 different countries including the status of Kenya’s Significant Economic Presence Tax.

 

Kindly find attached the detailed tax alerts for further details. We are available to discuss any matters highlighted thereon.

 

Kind regards,

 

	Robert W Maina | Associate Director | Intl Tax and Tran Svcs(ITTS)   Ernst & Young LLP Kenya-Re Towers, Upperhill, Kenya Cell:+254 728 494 787 | Office:+ 254 20 288 6000 | robert...@ke.ey.com Website: www.ey.com

 

 

 

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