Securities Transfers Tax

Posted on September 12th, 2018

Capital Gains Tax (CGT) was re-introduced in Kenya effective 1 January 2015 , consequently, any gain on transfer of property, including shares, is now subject to CGT at the rate of 5%. However, its re-introduction has adversely affected some key sectors in the economy including the Nairobi Securities Exchange (NSE), which has seen a major decline in trading.

Furthermore, the Government has also faced a major challenge in ensuring compliance and administration of CGT, especially on the transfer of shares that are listed on the NSE. In an effort to mitigate this and to encourage trading of shares on the NSE, the Government through the Finance Act 2015 has amended the Income Tax Act. The amendments exclude the transfer of shares traded on any securities exchange licensed by the Capital Markets Authority (CMA) from the provisions of Section 3(2) (f), of the Income Tax Act. The Exclusion means that any gain on transfer of shares that are listed on the NSE (and any other securities exchange that is licensed by the CMA) will not be subject to both CGT and Withholding Taxes. It is noteworthy that this will only take effect from 1 January 2016 and will only apply to shares transferred after this date.

Related Practice areas


About Us

Oraro & Company Advocates is a full-service market-leading African law firm established in 1977 with a strong focus on dispute resolution and corporate & commercial law. With a dedicated team of 10 partners, 4 senior associates, 10 associates, 1 lawyer and 36 support staff, the Firm has been consistently ranked by leading legal directories such as Chambers Global, IFLR 1000 and Legal 500 as a top-tier firm in Kenya.

Oraro & Company Advocates is an affiliate member of AB & David Africa.

Contact Us

Oraro & Company Advocates
ACK Garden Annex, 6th Floor, 1st Ngong Avenue
P. O. Box 51236 - 00200, Nairobi, Kenya.
T: +254 709 250 000
E: | W:

Oraro & Company Advocates © 2021