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Originally published by Kenyans
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May 25, 2026
2h ago

Bankers Warn of Higher Loan Costs Under New KRA Tax Plan

Bankers Warn of Higher Loan Costs Under New KRA Tax Plan

The Tax Appeals Tribunal allowed KRA to charge 16 per cent VAT on repossessed goods, something the bankers warn could increase loan costs on Kenyans who are already struggling with the tough economy...

✨ Key Highlights

The Kenya Bankers Association (KBA) is opposing a plan by the Kenya Revenue Authority (KRA) to charge Value Added Tax (VAT) on repossessed goods, warning it will increase loan costs for Kenyans.

  • The plan, included in the proposed Finance Bill 2026, is expected to raise the cost of credit.
  • The KBA is pushing for an amendment to exempt these transactions from VAT, arguing repossession is a recovery mechanism, not a profit-making activity.
  • The KRA maintains that creditors act on behalf of borrowers and are responsible for applicable taxes, with a tribunal allowing the 16 per cent VAT to continue.

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