Kenya's Finance Act 2025 reinstates a five-year limit on the carry forward of tax losses, effective July 1, 2025, marking a significant shift from the previous indefinite carry-forward regime. This change aims to broaden the tax base and ensure businesses contribute to the exchequer, presenting new challenges for companies managing historical and future losses.

• The new tax loss carry-forward limit is five years, a return to the pre-2015 policy.
• The Kenya Revenue Authority (KRA) will require detailed tracking and justified applications for extensions.
• Businesses, especially those in manufacturing and infrastructure, must adjust financial models and strategic planning to absorb losses within the new timeframe.