NAIROBI, Kenya — Kenya’s top accountants are urging the government to cut taxes and rework proposed regulations in a bid to jump-start industrial growth, attract investment, and put more money in the pockets of struggling households.
The Institute of Certified Public Accountants of Kenya (ICPAK) has submitted a bold proposal to Parliament calling for wide-ranging tax reforms as the Finance Bill 2025 enters the public participation stage.
The move comes as Treasury shifts away from past tax incentives that, while popular, failed to deliver real economic results.
In its submission, ICPAK is lobbying for a reduction in corporate income tax—from the current 30pc to 28pc—to align Kenya with regional and global benchmarks. The global average corporate tax rate is 23.51pc, while Africa’s sits at 27.28pc.
“Lowering the corporate tax rate can enhance Kenya’s status as an investment hub, discourage tax avoidance, and promote voluntary compliance,” said Hillary Onami, ICPAK Director of Public Policy and Research. The statement was echoed by FCPA Erastus Kwaka and FCPA Robert Waruiru, who emphasized the need to rethink the country’s tax competitiveness.
But the recommendations don’t stop there.
ICPAK is also challenging the government’s proposal to cap tax loss carryforwards at five years—calling instead for a 15-year window. According to the accountants, such losses often stem from large capital investments, and five years is far too short for these projects to begin yielding taxable profits.
“Capital-intensive projects, particularly those relying on investment allowances, need more time to recover and become profitable. Capping losses at five years could stifle long-term investments,” ICPAK argued.
Another hot-button issue: the Finance Bill proposes pushing the approval timeline for income tax exemptions from 60 to 90 days. ICPAK isn’t having it. They want the current 60-day limit retained to ensure faster processing and predictability for businesses.
And then there’s housing.
The accountants are sounding the alarm over a proposed repeal of the 15pc preferential tax rate for developers who build at least 100 housing units per year.
“This incentive is a key driver of large-scale housing projects. Its removal would make these developments less financially viable, ultimately limiting affordable housing supply,” the institute stated.
In a broader move to reduce the cost of living, ICPAK wants VAT slashed from 16pc to 15pc immediately, with a medium-term goal of bringing it down to 14pc. They argue that the high VAT rate has crushed consumer spending and weakened government revenue potential in a time of economic stress.
And there’s more help on the way if ICPAK gets its way.
They’re pushing for the removal of excise taxes on locally manufactured plastic goods, tax incentives for local vehicle assemblers, and the elimination of duties on industrial inputs—whether locally made or imported. In short, they want policies that actually support domestic production, not just lip service.
Also on the docket: implementation of Advance Pricing Agreements (APAs) for non-resident entities. This forward-thinking tax tool could provide multinational companies with certainty around how their cross-border transactions are taxed, reducing disputes and boosting investor confidence.
Kenya would be joining regional peers like Tanzania, Uganda, and Rwanda who already have APA frameworks in place, though uptake has been slow due to administrative constraints.
ICPAK’s proposals come amid sluggish growth in Kenya’s manufacturing sector. According to the Kenya National Bureau of Statistics’ Economic Survey 2025, the sector grew 2.8pc in 2024—up slightly from 2.2pc in 2023. Its GDP contribution, however, dipped to 7.3pc from 7.5pc the previous year.
The Kenya Association of Manufacturers has also been vocal, calling for fast-tracked implementation of the National Tax Policy to improve consistency and transparency in tax legislation.
With public participation on the Finance Bill 2025 in full swing, all eyes are now on Parliament. The choices made in the coming weeks could shape the future of Kenya’s economy—whether it leans toward burdensome taxation or pivots to a more investor-friendly, growth-focused model.
