Finance Act 2025 – Key Changes to Miscellaneous Fees, Levies, and Stamp Duty in Kenya
The Finance Act, 2025, signed into law on 26 June 2025, introduces targeted reforms to the Miscellaneous Fees and Levies Act and the Stamp Duty Act. These changes aim to support manufacturing, improve revenue allocation, and streamline corporate restructuring without unnecessary tax burdens.
Here’s our breakdown of what these amendments mean for businesses in Kenya.
1. New Exemptions for Mosquito Repellent Manufacturing
Inputs, raw materials, and machinery used in manufacturing mosquito repellents are now exempt from Import Declaration Fee (IDF) and Railway Development Levy (RDL) provided the Cabinet Secretary for Health recommends the exemption.
This measure supports public health objectives and encourages local production capacity.
📄 Reference: Kenya Ministry of Health
2. Creation of a Dedicated Fund from IDF Collections
Previously, fees under Section 7(2) of the Miscellaneous Fees and Levies Act were not earmarked for any specific use. The Finance Act 2025 changes that by directing 20% of IDF collections into a dedicated fund, to be managed under the Public Finance Management Act.
Fund Allocation:
- 10% – Kenya’s contributions to the African Union and other international bodies
- 10% – Revenue enforcement initiatives, supporting Kenya Revenue Authority (KRA) compliance operations
📌 Related reading: Managing KRA Audits
3. Clarified Duties on Specific Steel Products
The Act clarifies levy applications on selected steel products:
- HS Code 72.13 – Bars and rods, hot-rolled, in irregularly wound coils → IDF at 3.5% and RDL at 2%
- HS Code 72.14 – Other bars and rods of iron or non-alloy steel → Standard levies apply
- HS Code 72.24 – Alloy steel ingots and semi-finished products → Standard levies apply
4. Stamp Duty Exemptions for Internal Company Reorganisations
A major win for corporate groups the Act now exempts certain internal asset transfers from stamp duty when:
- The property is transferred in proportion to existing shareholding
- Transferred shares are in a subsidiary of the transferring company
Practical Uses:
- Spinning off subsidiaries
- Simplifying group structures
- Returning assets to shareholders in kind
Important: The exemption requires conditional shareholding ratios to be respected, and relevant documentation to be maintained.
Impact on Businesses
These updates will:
- Reduce costs for manufacturers in priority health sectors
- Improve accountability in IDF revenue allocation
- Provide tax relief for eligible corporate restructuring
- Clarify levy obligations for key industrial imports
📞 Need Expert Guidance?
Whether you’re assessing levy exemptions, restructuring your corporate group, or navigating compliance with updated steel duties, UHY Kenya can help.
Call us: +254 758 860047
Visit: www.uhy-ke.com
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