KRA Sets 8% Market Interest Rate for Fringe Benefit Tax Until September

Kenya, 8 July 2026 - The Kenya Revenue Authority (KRA) has announced that the market interest rate applicable for calculating Fringe Benefit Tax (FBT) will remain at  8% for the next three months.

 In a notice on Wednesday, the authority said that the rate has been set in line with  Section 12B of the Income tax and shall be used to determine the taxable value of employer-provided loans that attract Fringe Benefit Tax for July, August and September.

 The authority has further announced that the prescribed deemed interest rate has been maintained at 8%  for July, August and September 2026. This is in accordance with Section 16(2)(ja) of the Income Tax Act, according to the authority.

The taxman has further said that a 15% withholding tax on the deemed interest must be deducted and remitted to the Commissioner within five working days.

 Furthermore, the authority has retained the prescribed interest rate for Low Interest Benefit at 8%. It will, however,   apply for a longer period covering July, August, September, October, November and December 2026.

 The announcement comes barely a week after the authority announced a tax amnesty programme in an effort to ease the financial burden on taxpayers and boost voluntary tax compliance.

The authority said on Wednesday that the amnesty, which has been introduced under the Finance Act 2026, will waive 100% of penalties, interest and fines of tax debt accrued up to 1 December 2025.

The amnesty window opened on July 1 and will close on December 31, 2026, according to the authority. Eligible taxpayers have been encouraged to apply for the amnesty through the KRA iTax portal by settling their outstanding principal tax or enrolling in a structured payment plan.

“This builds on the success of the previous two amnesty cycles, which successfully recovered Kshs. 80.9 billion in principal tax payments while regularizing thousands of taxpayers,” the authority stated.