Second schedule of income tax act kenya

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What Tax Incentives do Businesses get?

The Tax Laws (Amendment) Act which was assented to on 25th April 2020 amends various tax legislations.

The Second Schedule to the Income Tax Act which dealt with capital allowances has been repealed and replaced with new second Schedule titled ‘Investment Allowance” whose key highlights are as follows:-

1. The rate of capital allowances has been rationalized to a maximum of 100%
2. Claims to be made on reducing balance basis
3. Decelerated claims: - 50% in the first year of investment and the residual to be claimed at different rates (10% or 25%) on a reducing balance.

The rates of deduction are as follows:-

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