The Institute of Certified Public Accountants of Kenya (ICPAK) is calling for a range of tax reforms aimed at revitalizing local industries and increasing disposable income for Kenyan households.
As public participation on the Finance Bill 2025 continues, ICPAK has submitted proposals to the National Assembly, recommending targeted tax cuts and adjustments to support economic recovery and attract investment. Their appeal comes amid Treasury’s shift away from broad tax incentives, which it argues have yielded minimal economic gains in the past.
Key among the proposals is a call to streamline Value Added Tax (VAT), corporate tax, and excise duty on essential locally manufactured products. ICPAK suggests these taxes either be reduced or scrapped entirely to stimulate growth and ease the burden on consumers.
In a more specific recommendation, the accountants’ body wants the corporate income tax rate lowered from 30% to 28%, aligning Kenya with regional and global trends. Currently, the global average stands at 23.51%, with Africa’s average at 27.28%.
“A reduced corporate tax rate would strengthen Kenya’s appeal as an investment destination,” ICPAK stated in its submission. “It would also discourage aggressive tax planning while encouraging voluntary compliance among businesses.”
The submission was signed by Director of Public Policy and Research Hillary Onami, Public Finance and Tax Committee member FCPA Erastus Kwaka, and Committee Convenor FCPA Robert Waruiru.
ICPAK also criticized the limited success of recent government tax compliance measures such as the electronic Tax Invoice Management System (eTIMS), noting that voluntary compliance, supported by fair tax policy, may offer a better path toward sustainable revenue growth.
Another key proposal from ICPAK is to revise the government’s plan to cap tax loss carry-forwards. The Finance Bill 2025 proposes a five-year limit, but ICPAK wants this extended to 15 years.
They argue that some companies accumulate legitimate tax losses due to investment incentives outlined in the Income Tax Act, and a longer window would provide a fairer opportunity for businesses to recover. Until now, businesses have been allowed to carry forward tax losses indefinitely, a provision tied to the now-shelved minimum tax.
“Setting a 15-year limit would strike a balance between the government’s revenue goals and the realities of long-term investments,” ICPAK said.
The proposals come as Treasury navigates a delicate balancing act seeking to boost revenue while avoiding measures that could choke economic activity.
