Kenya Releases Guidance on Retirement Gratuity Tax Exemption

The Kenyan Revenue Authority on Tuesday released guidance on a new law that would exempt gratuity retirement payment from income tax.

The Finance Act of 2025, which was signed into law at the end of June, amended Kenya’s Income Tax Act to exempt gratuity paid to employees after July 1, 2025. A gratuity refers to a single payment of money made by an employer to its employee as part of their retirement benefits to recognize their service.

• The guidance released Tuesday advised taxpayers that gratuity earned before July 1 was still subject to income tax that year that it was ...