Relief for Employers as KRA Keeps Fringe Benefit Tax Rate Unchanged at 8%

The Kenya Revenue Authority (KRA) has retained the market interest rate for Fringe Benefit Tax (FBT) and the prescribed rate for Deemed Interest at 8 percent for the last quarter of 2025. “For the purposes of Section 12B of the Income Tax Act, the Market Interest Rate is 8%. KRA further clarified: “For purposes of Section 16(2)(ja) of the Income Tax Act, the prescribed rate of interest is 8%. Fringe Benefit Tax (FBT) is levied on employers who offer loans to employees, directors, or members of their families at less than the market rate. The tax is calculated on the difference between the market rate and the actual interest rate charged on the loan.