September 26, 2018

Capital Gains Tax Exempted on Listed Securities Transactions


By Etaarifa Contributor

In the recently amended Finance Act 2015, the Capital Gain Tax has exempted listed securities’ transactions from payment.

The Capital Gains Tax was re-introduced in January 2015 but its implementation encountered challenges including: assessment, computation, collection and remittance to the Kenya Revenue Authority; leading to a stalemate between the taxman and stock brokers.

The Finance Act also amended the Income Tax Act to allow a company introducing shares through listing by introduction on any securities exchange to pay corporate tax at the rate of 25 percent for a period of five years, commencing immediately after the year of income following the date of such listing.

Currently, there already exists a tax incentive for companies listing through an Initial Public Offering (IPO).

The Finance Act also amended the Stamp Duty Act by removing duty on transfer of real estate into a Real Estate Investment Trust (REIT) before December, 2022.

National Treasury Cabinet Secretary Henry Rotich also exempted documents executed in connection with Asset-Backed Securities (ABS) approved by the Capital Markets Authority (CMA) from payment of stamp to enhance growth in the uptake of ABS.

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