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KRA Tax on Investments in Kenya
Investment Taxation in Kenya (2026)
Understanding how your investment returns are taxed is crucial for making informed decisions. Here's a comprehensive breakdown.
Tax Rates by Investment Type
| Investment | Tax Type | Rate | Deducted By |
|---|---|---|---|
| MMF / Fixed Deposit | Withholding Tax on Interest | 15% | Fund manager / Bank |
| Treasury Bills | Withholding Tax on Interest | 15% | CBK |
| Treasury Bonds | Withholding Tax on Interest | 15% | CBK |
| Sacco Dividends | Withholding Tax on Dividends | 5% | Sacco |
| Stock Dividends | Withholding Tax on Dividends | 15% | Company |
| Stock Capital Gains | Capital Gains Tax | 15% | Self-assessed |
| Real Estate Capital Gains | Capital Gains Tax | 15% | Self-assessed |
Key Takeaways
MMFs and Fixed Deposits (15% WHT)
- Tax is on interest earned, not your principal
- Automatically deducted — no filing needed
- Same rate whether you earn KES 100 or KES 10 million
Sacco Dividends (5% WHT)
- Lower tax rate than MMF interest (5% vs 15%)
- This makes Saccos more tax-efficient for pure returns
- However, Saccos have lower liquidity
Capital Gains (15%)
- Applies when you sell shares or property at a profit
- You must self-assess and file with KRA
- Losses can be carried forward to offset future gains
Tax-Efficient Strategies
- Maximize Sacco dividends — 5% WHT is the lowest rate
- Use MMFs for liquidity — accept the 15% WHT for quick access
- Hold stocks long-term — capital gains tax only applies when you sell
- Keep records — track all investment income for accurate filing
Important Notes
- All rates are as of 2026 and subject to change via Finance Act
- Non-residents may face different rates
- Consult a tax advisor for complex situations
- KRA PIN is required for all investment accounts in Kenya