Tax Relief or a Tax Escape Door?

Good evening. It’s Brian from The Kenyan Wall Street. Two tax issues caught my eyes today. The Finance and National Planning Committee is preparing to modify the Income Tax Act to make it less severe for firms that want to restructure their internal organization. But tax and revenue experts think it needs some guard rails. Also, KRA has a new directive that will begin in May…

Here are our day’s stories…

Tax Relief or a Tax Escape Door?

By Brian Nzomo

In Kenya’s current tax regime, companies can trigger capital gains tax or withholding tax simply by moving assets within their own structures, as though internal reorganizations were ordinary market sales. The result is a system that taxes form rather than substance, penalizing firms for rearranging ownership even when no real economic gain has occurred; a friction that has long frustrated many companies. 

A proposed amendment is set to correct this by carving out tax relief for qualifying internal restructurings and, in doing so, bringing the law closer to commercial reality. However, the effort to fix one distortion risks introducing another: by loosening definitions without fully anchoring them in safeguards, the bill creates space for transactions that look internal but function as disguised disposals. 

What concerns regulators and taxation experts is not the principle of relief, but the absence of constraints such as clear holding periods, strict group tests, and consistent guardrails across the tax code. The question, then, is whether Kenya is refining its tax system or opening a channel through which taxable gains may slip away.

Read the article here >>>>>

As Treasury Turns to PPPs, It Needs Deal Experts

By Fred Obura

For years, infrastructure deals were financed through external borrowing, with the government negotiating loans and contractors following behind. That model is now constrained, and the state is bringing in capital markets experts to do what it has not traditionally done; structure complex PPP instruments that can pull money from pension funds and insurers. These advisors are not peripheral; they are central to translating infrastructure projects into investable assets that domestic capital can actually absorb. The shift, then, is not just about funding but also about outsourcing financial engineering to bridge a gap the state cannot close on its own, with all the execution risks that come with it.

Read the article here >>>>>

Housing Lender Floats KSh 3bn Bond

By Harry Njuguna 

The Kenya Mortgage Refinance Company (KMRC) once relied on a mix of concessional funding and earlier capital raises, but rising interest rates forced it to step back from the market when borrowing became too expensive to support its affordable housing mandate. With rates now easing and liquidity conditions improving, it is returning with a KSh 3 billion bond designed to refinance home loans through a sustainability-labelled structure. The instrument is aimed at institutional and retail investors, effectively channeling pension and savings capital into long-term mortgage lending across the country. The underlying shift is not just funding but sequencing; Kenya is trying again to connect domestic capital markets to housing finance, but on terms that must now balance affordability, investor return, and policy intent more tightly than before.

Read the article here »»»»»

Heads Up

INSIGHT : How Private Capital Activity Looked Like in Q1

By Brian Nzomo

Private capital in Africa is slowing in motion but not in value, as fewer deals are being done even as a handful of very large transactions dominate the totals. The quarter’s numbers are increasingly shaped by concentration rather than breadth, with Nigeria supplying most of the headline value through two outsized deals that distort the regional picture. Beneath that, mid-market activity is holding up unevenly, with Egypt emerging as a rare pocket of consistent deal flow while most other markets thin out. The broader signal is not collapse but compression: capital is still present, but it is flowing through fewer channels, narrower sectors, and increasingly into deals large enough to carry the statistics on their own.

Read the article here >>>>>

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