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The Kenya Revenue Authority (KRA) has announced that the market interest rate used to calculate fringe benefit tax will remain at 8 per cent for the period covering July to September 2026.
In a public notice released on Wednesday, KRA said the rate has been prescribed under Section 12B of the Income Tax Act and will apply throughout July, August and September.
The tax authority also confirmed that the deemed interest rate under Section 16(2)(ja) of the Income Tax Act has been set at 8 per cent for the same three-month period.
KRA noted that taxpayers are required to deduct a 15 per cent withholding tax on deemed interest and remit it to the Commissioner within five working days.
Additionally, the authority said the low interest benefit rate prescribed under Section 5(2A) of the Income Tax Act has also been retained at 8 per cent. Unlike the other rates, this one will remain effective for six months, from July through December 2026.
The three prescribed rates were published together in a single public notice to provide guidance on the applicable interest rates under the relevant tax provisions. The notice also outlines the effective dates for each rate and the corresponding sections of the Income Tax Act.
KRA urged taxpayers to pay close attention to the applicable periods and ensure compliance with the relevant tax obligations.
