G/SCM/N/3/KEN, G/SCM/N/16/KEN  
G/SCM/N/25/KEN, G/SCM/N/38/KEN  
G/SCM/N/48/KEN, G/SCM/N/60/KEN  
G/SCM /N/71/KEN, G/SCM/N/95/KEN  
G/SCM/N/123/KEN, G/SCM/N/155/KEN  
G/SCM/N/186/KEN, G/SCM/N/220/KEN  
G/SCM/N/253/KEN, G/SCM/N/284/KEN  
G/SCM/N/315/KEN, G/SCM/N/401/KEN  
 
6 December  2023 
(23-8270) Page: 1/5 
Committee on Subsidies and  
Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF  
THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON  
SUBSIDIES AND COUNTERVAILING MEASURES  
KENYA 
The following communication , dated and received on 1 December  2023, is being circulated at the 
request of the delegation of Kenya . 
 
_______________  
 
 
Table of Contents  
1  EXPORT PROCESSING ZONES  ................................ ................................ .......................  2 
2  CAPITAL  MARKETS AUTHORITY  ................................ ................................ ...................  3 
3  KENYA REVENUE AUTHORITY  ................................ ................................ .......................  4 
 
  G/SCM/N/3/KEN • G/SCM/N/16/KEN • G/SCM/N/25/KEN • G/SCM/N/38/KEN • G/SCM/N/48/KEN • 
G/SCM/N/60/KEN • G/SCM/N/71/KEN • G/SCM/N/95/KEN • G/SCM/N/123/KEN • 
G/SCM/N/155/KEN • G/SCM/N/186/KEN • G/SCM/N/220/KEN • G/SCM /N/253/KEN • 
G/SCM/N/284/KEN • G/SCM/N/315/KEN • G/SCM/N/401/KEN  
 
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  1  EXPORT PROCESSING ZONES  
1. Title of the subsidy programme  
Benefits to Export Processing Zone enterprises.  
2. Period covered by the notification  
2021-2022.  
3. Policy objective and/or purpose  of the subsidy  
The policy objective is to encourage investment in the EPZ area as well as  boost exports from the 
EPZ area.  
4. Background and authorit y for the subsidy  
a. The benefit programme is anchored under the EP Z Act. 
b. The programme is administered by the EPZ Authority . 
5. Form of the subsidy  
The subsidy is available in the following form, as prescribed by the law;  
Benefits accruing to Export Processing Zone enterprises;  
1.  The export processing zone enterprises, the export processing zone developers and the 
export processing zone operators shall be granted exemption from all existing and future 
taxes and duties payable under the Customs and Excise Act (Cap. 472) and Value Ad ded 
Tax Act on all export processing zone imports for use in the eligible business activities of 
the export processing zone enterprise including machinery and equipment, spare parts, 
tools, raw materials, intermediate goods, construction materials and equi pment, office 
equipment and supplies, and transportation equipment, (but this is subject to the 
limitations on goods specified in the EPZ Act and as per the conditions specified in the 
Customs and Excise Act and the Value Added Tax Act).  
2.  The export process ing zone enterprises, export processing zone developers and the export 
processing zone operators are granted the following exemptions;  
a. exemption from registration under the Value Added Tax Act;  
b. exemption from the payment of excise duties as specified in th e Customs and Excise Act 
(Cap. 472);  
c. exemption from the payment of income tax as specified in the Income Tax Act (Cap. 470) 
for the first ten years from the date of first sale as an export processing zone enterprise, 
(except that the income tax rate shall be limited to twenty -five per cent  for the ten years 
following the expiry of the exemption granted under this paragraph ); 
d. exemption from the payment of withholding tax on dividends and other payments made to 
non-residents during the period that the export processing zone enterprise is exempted 
from payment of income tax under paragraph (c);  
e. exemption from stamp duties on the execution of any instruments relating to the business 
activities of an export processing zone enterprise;  
f. exemption from quotas or oth er restrictions or prohibitions on import or export trade with 
the exception of trade in firearms, military equipment or other illegal goods;  
g. exemptions fro m rent or tenancy controls;  
(The exemptions are without prejudice to any other written law .) G/SCM/N/3/KEN • G/SCM/N/16/KEN • G/SCM/N/25/KEN • G/SCM/N/38/KEN • G/SCM/N/48/KEN • 
G/SCM/N/60/KEN  • G/SCM/N/71/KEN • G/SCM/N/95/KEN • G/SCM/N/123/KEN • 
G/SCM /N/155/KEN • G/SCM/N/186/KEN • G/SCM/N/220/KEN • G/SCM/N/253/KEN • 
G/SCM/N/284/KEN • G/SCM/N/315/KEN • G/SCM/N/401/KEN  
 
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  6. To whom  and how the subsidy is provided  
The subsidy is available to Export Processing Zone Enterprises, Export Processing Zone Developers 
and Export Processing Zone Operators.  
7. Amount of the subsidy  
Information not available at the moment.  
8. Duration of the subsidy  
The duration of the subsidy is as defined in the law (as shown above).  
9. Statistical data permitting an assessment of the t rade effects o f the subsidy  
N/A. 
2  CAPITAL  MARKETS AUTHORITY  
1. Title of the subsidy programme  
Policy Tax Incentive s. 
The above incentives policy by the Capital Markets Authority was applied from 1995 to 2015 . There 
is no information of its application thereafter.  
2. Period covered by the notification  
1995-2015. 
3. Policy objective and/or purpose  of the subsidy  
The policy objec tive is to promote investment through investment  in capital markets.  
4. Background and authorit y for the subsidy  
a. Laws and regulation:  Capital Markets Authority  Act. 
b. Responsible authority : Capital Markets Authority . 
5. Form of the subsidy/ To whom and how the subsidy is provided  
The subsidy is available to investors in the capital market . 
6. Amount of the subsidy  
The information regarding the amount of the subsidy provided is not available . 
7. Duration of the subsidy  
The program was up to 2015 (as indicated already).  
8. Statistical data permitting an assessment of the t rade effects o f the subsidy  
N/A. G/SCM/N/3/KEN • G/SCM/N/16/KEN • G/SCM/N/25/KEN • G/SCM/N/38/KEN • G/SCM/N/48/KEN • 
G/SCM/N/60/KEN • G/SCM/N/71/KEN • G/SCM/N/95/KEN • G/SCM/N/123/KEN • 
G/SCM/N/155/KEN • G/SCM/N/186/KEN • G/SCM/N/220/KEN • G/SCM /N/253/KEN • 
G/SCM/N/284/KEN • G/SCM/N/315/KEN • G/SCM/N/401/KEN  
 
- 4 - 
 
  3  KENYA REVENUE AUTHORITY  
1. Title of the subsidy programme  
Tax incentives in form of capital deductions.  
2. Period covered by the notification  
2021-2022.  
3. Policy objective and/or purpose of the subsidy  
The purpose of the programme is to encourage investors to put up their investments in Kenya.  
4. Background and authorit y for the subsidy  
a. Laws and regulations : KRA Act, Income Tax Act . 
b. Authorities : The National Treasury & Economic  Planning . 
Kenya Revenue Authority (KRA) . 
5. Form of the subsidy/ To whom and how the subsidy is provided  
The tax incentive is in form of capital deductions broken down in the following areas;  
a. Industrial building deductions;  
Industrial deductions cover capital expenditure incurred by a person on the construction of 
an industrial building to be used in a business carried out by them or their lessee . This 
allowance is claimed by the person who incurred the capital expenditure, i.e., the owner of 
the buildi ng and the building must be used for the purpose of the business only so as to 
enjoy the industrial building deduction.  
No. Item  Rate  
1.  Industrial Building  2.5% capital deduction applicable within the first Forty (40) years of 
operation.  
2.  Hotels  10% capital deduction applicable within the first 10 years of 
operation . 
3.  Hostels and Educational 
Buildings certified by the 
commissioner  50% capital deduction for the first 2 years of operation . These 
buildings include ; Laboratory, Workshops, Accommodation halls, 
classrooms, dining halls/cafeteria, other halls for use by the 
students, administration building, sporting facilities and staff 
quarters.  
4.  Building in uses for training of 
film producers, actors or crew  100% capital deduction.  
5.  Renta l residential building 
approved by the minister in a 
planned developed area  25% capital deduction.  
6.  Commercial building  25% capital deduction in a developed area . 
b. Farm-works deductions ; 
This refers to expenditure by the owner or tenant of agricultural land on construction of 
farm works.  
Applicable rates:  
Farmhouse - Allow 1/3 of the expenditure on one house . Employee houses qualify.  
Any other immovable buildings for the proper operation of the farm deduct 100 % if the 
whole amount.  G/SCM/N/3/KEN • G/SCM/N/16/KEN • G/SCM/N/25/KEN • G/SCM/N/38/KEN • G/SCM/N/48/KEN • 
G/SCM/N/60/KEN  • G/SCM/N/71/KEN • G/SCM/N/95/KEN • G/SCM/N/123/KEN • 
G/SCM /N/155/KEN • G/SCM/N/186/KEN • G/SCM/N/220/KEN • G/SCM/N/253/KEN • 
G/SCM/N/284/KEN • G/SCM/N/315/KEN • G/SCM/N/401/KEN  
 
- 5 - 
 
  c. Wear and tear deductions ; 
This is an allowance that is granted to the investor to cater for wear and tear of the 
machinery . 
Applicable rates ; 
Class   
Class I at 37.5%  Heavy earth moving self -propelling equipment such as:  
Caterpillars, tippers, lorries of 3 tonnes and above, tractors (heed, Train, Engine head, 
buses and coaches, loaders, rollers and graders, transport trucks, combine harvesters, 
mobile cranes and forklifts etc.  
Class II at 30% Office electronic machinery and equipment e.g. computers and its peripherals, computer 
printers, scanners and processors, calculators, mobile phones, photocopiers, stamping and 
franking/fax machines, duplicating machines, photo printers, cash registers, tax registers.  
Class III at 25% Other self -propelling machines  such as motor bikes, saloon cars and hatchbacks, tutuk, 
pick-ups and delivery vans, aircrafts, minibuses (nissans included), lorries < 3 tonnes.  
Class IV at 
12.5%  Other non -self-propelling machine such as;  
Ship, Bicycles, Wheelbarrow, lifts & conveyor belts, carpets and curtains, partitions in a 
building, shelves, safes, sign boards and advertising stands, furniture and fittings, plant 
and machinery, security and alarm systems fixed in a car, tractor trailer , train coaches, 
milking machinery, beds in a hotel, a plough and lawn mowers, refrigerator, T.V, non -self-
propelling forklifts and cranes, boats and petroleum pipeline.  
Class V at 20% Computer Software and for Telecommunication equipment its 20% for five  years on a 
straight line basis  
d. Investment deductions ; 
This is a deduction granted on cost of a building and machinery installed therein as an 
incentive to encourage investments.  
Applicable rates;  
• Investments situated within Nairobi, Mombasa and Kisumu - 100% investment 
allowance.  
• Investment Deduction -Manufacturing Under Bond  - For production of export goods 
under bonded warehouses.  
• Investment Deduction -Export Processing Zones  - 100% investment dedu ction.  
• Shipping Allowance - applies to the  purchase of a new and unused power driven ship of 
more than 125 tons gross or  the purchase and subsequent refitting for the  purpose of 
that business of a used power -driven ship of more than 125 tons  - 100% investm ent 
deduction.  
6. Amount of the subsidy  
The information regarding the amount of the subsidy provided is not available.  
7. Duration of the subsidy  
Ongoing - the duration of the subsidy is not specified.  
8. Statistical data permitting an assessment of the t rade effec ts of the subsidy  
N.A. 
__________