Kenya Considers Capital Gains Tax on Foreign Investment Exits

The East African nation is proposing a 15% capital gains tax on foreign investors selling shares in Kenyan companies, potentially impacting venture capital returns.

The Proposal Explained

According to the Finance Bill 2026, if an investor sells shares derived from Kenyan assets or operations offshore, the Kenya Revenue Authority (KRA) will levy a 15% tax. This move aims to ensure that Kenya captures some of the value created within its borders.

Implications for Investors

While proponents argue this would establish a fairer system where Kenya benefits from economic activity generated within the country, critics worry about investor uncertainty and competitiveness:

• The tax could deter foreign investment if returns are reduced
• Companies may restructure holdings to avoid exposure
• Kenya risks becoming less attractive compared to regional peers with more favorable tax regimes

This echoes previous experiences with Tullow Oil and Java House, where similar disputes required case-by-case resolution.

Other Key Developments

• Prosus is seeking EU approval to soften its obligation to sell Delivery Hero shares amid a potential takeover battle
• Fincra secured a Bank of Ghana EPSP license enabling direct payment processing in Ghanaian Cedis