Kenya to start taxing startup workers’ shares before they get paid
- The Finance Bill 2025 proposes to repeal the tax deferral on Employee Share Ownership Plans (ESOPs), imposing tax liabilities at the point of vesting.
- The bill seeks to eliminate the 100% investment deduction for companies investing in hotel buildings, manufacturing sites, and equipment.
- The preferential corporate tax rate of 15% for companies constructing at least 100 residential units annually is also proposed to be repealed.
The proposed changes in Kenya's Finance Bill 2025 could undermine the startup ecosystem that has been pivotal for innovation and economic growth. It is crucial for the government to find a balance between revenue generation and maintaining an attractive environment for startups to thrive.
