Category: Business Daily

Three-quarters of companies registered for corporate income tax (CIT) did not pay taxes on earnings in the year to June, pointing to deepening losses and tax avoidance.

Fresh data from the Kenya Revenue Authority (KRA) shows that 156,232 out of 618,201 firms on the corporate tax register paid up their fair share to the taxman, reflecting a compliance rate of 25.2 percent.

MPs have approved a sessional paper on the privatisation of Kenya Pipeline Company (KPC), where the government will retain a 35 percent ownership in the company.

This, even as opposition MPs vowed to move to the High Court to block the privatisation, claiming an ambush by the Executive.

A push for alternative systems to dollar-based payments has intensified with regional platforms prepping to drive continental trade, amid concerns over time and cost involved in trading using the US currencies

Last week, a payment system backed by the African Export-Import (Afrexim) Bank was rolled out in Nairobi, targeting to connect Kenyan traders with their counterparts across borders, through the Africa Trade Gateway (ATG).

Hotelier William Osewe Guda has denied blocking his estranged wife-Stella Mutheu from the management of Ranalo Foods. The two co-own the city restaurant business.

In a responding affidavit to Ms Mutheu’s case, Mr Osewe told the High Court that his former wife is still listed as a shareholder of Ranalo Foods, refuting claims that he has blocked her from the day-to-day operations of the restaurant.

The economy expanded by five percent in the second quarter of 2025, compared to 4.6 percent in the same period last year, driven by a rebound in construction activity and strong performance in the agriculture and financial sectors.

A new report by the Kenya National Bureau of Statistics (KNBS) on the country’s total economic output, or gross domestic product (GDP), shows that growth in construction helped stimulate the economy, which also benefited from lower interest and exchange rates.

The construction and mining sectors rose by 5.7 percent and 15.3 percent, respectively, after contracting in the second quarter of 2024.

Although agriculture registered slower growth in the review period compared to the second quarter of 2024, it remained a major driver of the economy, expanding by 4.4 percent. Agriculture contributes about a fifth of GDP. The slowdown in crop production was attributed to reduced output of tea and sugar.

‘In the second quarter of 2025, the Gross Value Added (GVA) for agricultural activities recorded a slight deceleration compared to the corresponding quarter of 2024,’ said KNBS in its Quarterly Gross Domestic Product Report.

‘Nonetheless, favourable weather conditions continued to support both crop and animal production during the review period,’ it added in the report released on Tuesday.

The growth, however, was slower than in the same period in 2023, when the economy expanded by 5.5 percent on the back of strong agricultural performance.

KNBS also attributed the second-quarter growth to an increase in transportation and storage (5.4 percent) and financial and insurance (6.6 percent), though these sectors grew at a slower pace compared to 2024.

The turnaround in construction stood out. The sector’s improved performance was partly due to increased spending on affordable housing projects across the country, alongside President William Ruto’s focus on road maintenance.

‘The sector’s performance was manifest in cement consumption and import of construction materials,’ said KNBS, noting that cement consumption increased by 23.9 percent to 2,424,400 tonnes, up from 1,957,100 tonnes in the corresponding period of 2024.

Imports of bitumen-a sticky, waterproof binder mainly used in road and runway construction-rose to 22,659,300 tonnes from 15,566,200 tonnes in the same quarter of 2024, reflecting increased government investment in road projects.

Last year, the construction sector contracted for two consecutive quarters-the second and third-due to significant budget cuts to mega infrastructure projects under the Kenya Kwanza government, coupled with the high cost of building materials, including cement and bitumen.

The economic rebound, which comes amid lower interest and exchange rates as well as renewed activity at the Nairobi Securities Exchange (NSE), remains weaker than in the second quarter of 2023, when GDP grew by 5.5 percent.

Last year, growth was constrained by high interest rates after the Central Bank of Kenya (CBK) raised its benchmark lending rate to curb inflationary pressures. Since then, the CBK has been easing the Central Bank Rate, signalling commercial and microfinance banks to lower borrowing costs and stimulate the economy.

The CBK has also introduced regulations for credit guarantee firms to give lenders confidence when extending loans to high-risk borrowers, including micro, small, and medium enterprises (MSMEs), which are considered the engines of the economy but remain underserved by banks.

Credit guarantee firms will be required to raise a minimum capital of Sh1 billion and stand ready to absorb a percentage of potential loan losses, in return charging banks for this loan insurance service.

In the wake of tough economic times, many employers have been forced to restructure their businesses, reduce their workforce, or shut down entire operations.

For many people, appearance of a redundancy notice can truly turn their world upside down as it suddenly takes away your job.

While a severance cheque may come with short-term financial relief, redundancy often signals a major career disruption and financial uncertainty. The Employment Act, 2007 defines redundancy as a situation where an employee loses a job involuntarily, typically due to the employee’s role or services becoming unnecessary, often as a result of structural, technological, or other changes within the organisation.

Understanding the legal and tax obligations involved in the redundancy is crucial for both employers and employees.

Compliance with the law ensures that rights and responsibilities of parties involved are upheld and help mitigate potential intervention from the courts or other authorities, if due process is not observed.

Before an employer can lawfully declare redundancy, they must follow a specific procedure outlined in the Employment Act.

Failing to observe any of the specified steps could render the entire process illegal and expose the company to lawsuits or compensation claims.

First, if the employee is a member of a trade union, the employer must inform both the union and the labour officer in charge of the area of the reasons for, and the extent of, the intended redundancy at least one month before termination.

If the employee is not in a union, the employer must notify the employee directly in writing and also inform the labour officer.

When deciding which employees will be affected by the redundancy, the employer must use fair and objective criteria. These include the employees’ tenure, their skills, their performance, and their reliability. Courts require employers to document and justify the selection criteria used. Importantly, employees must not be treated unfairly because of their union membership status. Whether or not an employee belongs to a union should not affect the terms of separation.

The employer must pay for pending leave days, give at least one month’s notice or one month’s salary in lieu, and severance pay of at least 15 days’ wages for every full year worked. More generous packages may be offered under contracts or internal policies.

While the Employment Act does not explicitly require consultation, Kenyan courts have emphasised the importance of genuine consultation with affected employees or their representatives. Failure to consult may render the redundancy process procedurally unfair.

While severance pay is intended to alleviate the impact of the sudden loss of income and provide a financial buffer while the employee seeks new employment opportunities or undergoes retraining, the compensation is not tax-exempt in Kenya.

Under the current tax laws, pay received by an employee upon termination is taxable, unless the individual qualifies for specific tax privileges granted by applicable laws.

The methodology for calculating tax on severance pay is determined based on the provisions of the employment contract and follows the procedures set forth in the Income Tax Act.

Employers are required by law to withhold the appropriate taxes and deductions from severance pay prior to issuing the final cheque to the employee.

Inaccurate or incomplete compliance with these requirements may result in penalties from the authorities and potential legal action from employees or their unions.

In a period of rising job losses and corporate restructuring, it is essential for employers and employees to have a clear understanding of the legal and tax consequences associated with redundancy.

For employers, strict adherence to the law is not only a statutory requirement but also fundamental to maintaining trust and fairness during transitions.

Employees should also familiarise themselves with the provisions of the law and consult with qualified legal or tax professionals as appropriate.

So, don’t wait until the cheque clears to ask questions. Whether you’re an HR professional or an employee, understanding your rights and responsibilities is paramount.

If you asked Addis Alemayehou where to put money between Kenya and Ethiopia, his answer would depend on the size of the cheque. The seasoned entrepreneur, who has invested in both markets, believes scale is everything.

‘If you gave me Sh100 million, I would bet it on Ethiopia. You can call me biased, but I’d rather go for a market of 130 million people than one of 50 million or 60 million people. The potential for growth is much higher. Ethiopia’s economy has been growing faster than Kenya’s. We caught up, and now we’re ahead. A giant has awakened next door, and it’s not going back to sleep. For Sh10 million, however, I’d put that in Kenya, it’s competitive, but with the right niche, you’ll still thrive,’ he tells BDLife.

Three former managers of the National Bank of Kenya (NBK) have been acquitted by a Nairobi court of charges of fraudulently clearing six companies’ loan arrears totalling to Sh1.056 billion.

Milimani magistrate Gilbert Shikwe quashed the charges brought against George Weke Jaba (chief credit officer), Bonface Amunga Biko (executive director corporate banking), and Dennis Chumbe who was the head medium business.

The Executive is petitioning Parliament to repeal a tax on clinker importation, revealing huge disruptions it has caused in the steel and cement industries since its introduction two years ago.

Trade Cabinet Secretary Lee Kinyanjui says the Executive is taking action after observing the impacts the levy has had on the operations of companies in the steel and cement sectors.

Tea produced in Rwanda and Burundi suffered the sharpest fall in prices at the weekly regional auction in Mombasa over the first eight months of 2025 amid overall subdued demand from buyers, which is likely to trim farmers’ earnings this year, analysis showed.

Data showed that the average price from Rwanda stood at $1.61 (Sh208.07) over the first eight months of 2025, compared to $2.84 (Sh367.04) in a similar period, marking a 43.3 percent drop, which is the sharpest among countries trading at the regional auction run by the East African Tea Trade Association.