Kenya to End Tax Incentives on Infrastructure Bonds

• Tax-free status of infrastructure bonds to be limited to green projects under new Finance Bill 2024.
• Investors to face 5% withholding tax on non-green IFBs, potentially altering market dynamics.

Nairobi, Kenya – Kenya will end tax incentives on infrastructure bonds (IFBs) this year, marking a significant policy change as the National Treasury aims to reduce foregone revenue. The tax-free nature of IFBs under Kenya’s Income Tax Act has historically attracted investors, leading to over subscription compared to ordinary bonds, especially in a tight fiscal environment.