The Finance Act 2020 (the Act), which was assented to by President Uhuru Kenyatta on 30th June 2020, introduced a wide range of tax and other measures aimed at raising additional revenue for the financial year 2020/21. Among the measures introduced by the Act is the Voluntary Tax Disclosure Programme (the VTDP).

The program is designed to assist taxpayers achieve tax compliance, by allowing them to voluntarily declare their historical tax liabilities to KRA and settle the principal tax, while obtaining the benefit of not having to pay, under certain conditions, the resulting penalties and interest.

The tax program will run for a period of 3 years with effect from 1st January 2021 to 31st December 2023.

The tax applies for all taxpayers provided that: –

1. The tax liabilities were accrued by the taxpayer within a period of 5 years prior to 1st July 2020.

2. The taxpayer is not under audit or investigations and is not party to ongoing litigations in respect of tax liabilities or any matter relating to the tax liabilities.

3. The taxpayer has not been notified of a pending audit or investigation by the commissioner.

The key benefit for the taxpayer is that: –

1. They qualify for relief in respect of the penalties and interest.

2. Shall not be prosecuted with respect to the tax liabilities disclosed.

The taxpayers who opt for the program will be entitled for the following: –

1. 100% waiver, if the principal tax is disclosed and paid within the calendar year 2021

2. 50% waiver, if the principal tax is disclosed and paid within the calendar year 2022

3. 25% waiver, if the principal tax is disclosed and paid within the calendar year 2023

No waiver of the penalties and interest will be available if the principal tax is paid after the third year.

It’s important to note that the relief of payment penalties and interest and prosecution shall be withdrawn by the commissioner where: –

1. The commissioner discovers that the taxpayer failed to disclose material facts in respect of the relief before the expiry of the agreement entered into with the taxpayer.

2. The taxpayer fails to meet the term of the agreement entered into with the commissioner

To take advantage of the program, please contact us for: –

1. An internal tax review to ascertain your status particularly for non-disclosures and incorrect reporting.

2. Arising from the review, we quantify the exposure and make declarations to KRA as soon as possible in order to obtain full benefit of the relief available.

For more information on this, please feel free to contact:

Benson Ngugi – benson.ngugi@attorneysafrica.com

Ken Rutere – ken.rutere@attorneysafrica.com



On 30th June 2020 the president of Kenya assented the Finance Act, 2020.

One of the key changes was on the corporation tax with the introduction of the minimum tax regime. The minimum tax payment is 1% of the gross turn over.

The effective date of the tax is 1st January 2021

The tax is a base tax payable by all whether one has made a profit or not. The income that are exempted from the minimum tax are: –

  1. Income exempted by the Act
  2. Employment income
  3. Income that is subject to residential income tax
  4. Income that is subject to Turn over Tax
  5. Income that is subject to capital gains tax.
  6. Income of extractive sectors

The minimum tax will be payable in four instalments by the 20th day of the 4th, 6th, 9th, and 12th month of the year of income.

It’s important to note that instalment tax is still applicable, but however this has been set such that where the instalment tax is higher that minimum tax, then minimum tax is payable. On the other hand, if the minimum tax is higher than instalment tax, then the minimum tax becomes payable.

Of concern is that companies which report tax losses due to investment incentives granted by the government will suffer the minimum tax which claws back the intended benefit to the investor.

Covid-19 has impacted many businesses negatively and its expected that such business will suffer loses in the coming years. The irony is that whilst the government is reducing the rate of tax for profit making companies, the introduction of the minimum tax will definitely have an impact on loss making companies and some startups.

For more information on this, please feel free to contact

Benson Ngugi – benson.ngugi@attorneysafrica.com

Ken Rutere – ken.rutere@attorneysafrica.com


Alternative Justice System Policy

In an effort to breakdown conceptual structures of legal practice and thought adopted from our colonial and post-colonial contexts– Chief Justice David Maraga, on 28th /Aug/ 2020, launched the Alternative Justice System (AJS) Policy which is aimed at enhancing access to justice and supporting expeditious delivery of justice to Kenyan citizens. The Alternative Justice Systems (AJS) policy was drafted by the Taskforce on Informal Justice Systems gazetted by the retired Chief Justice Dr. Willy Mutunga in May 2016.

The AJS policy will provide alternative forms of dispute resolution mechanisms, including traditional approaches, as long as they:

Do not Contravene the Bill of Rights,

Are not repugnant to justice or morality

Are not inconsistent with the Constitution or any written law.

During the Launch, CJ Maraga noted that; Kenyan communities have, for generations, had their own justice systems that have held, and continue to hold, societies together. With this in mind, the Alternative Justice Systems as adopted in this Policy are community-centered and reflect the lived realities of the people and, therefore, more accessible to people. 

Justice will be achieved differently: The AJS system will prevent injustice and reduce harm suffered by people by focusing on root causes of injustice and on justice needs of entire communities and societies rather than just individuals. He noted that the policy is an important guide on the operationalization of the systems, for all the institutions in the justice system sector.

His Deputy, Chief Justice Philomena Mwilu said that ideas and methods between formal Justice systems and Alternative Justice System practices and mechanisms will improve each other and deepen justice provision in the country.

We are eager to experience the changes the AJS will bring to the Kenyan citizens.



Acquisition of assets is one of the main signs of growth and investments into your future. Real estate investment is the purchase of a future income stream from property and can offer several advantages over other types of investments. These include;

• Potentially higher returns,
• Stability,
• Inflation hedging (Investments in real estate is not finite on purchases of Property
• and diversification.

Once you have decided on Real estate as one of your investments, We, at Igeria & Ngugi Advocates will gladly walk you through the process of purchasing property and any other matters that may arise from the said acquisition.
Here are the 9 major steps of Acquisition of Property:

1. Searches and Inspection of the Title
Once you identify land it’s always recommended that you visit the lands registry so as to conduct a search of the land in question. You will need a copy of the land title deed from the seller to enable the search. This will normally take three days to get the results of the current registered owner of the land and if there is any encumbrance (third-party rights) entered against the land.

2. Preparation of Offers and Price Negotiation
Once you are satisfied with the search results as presented by your Advocates from the lands registry and the company registry (where a company is involved), then you can have the Vendor’s Advocate prepare an offer for your consideration. The letter of offer/letter of intent contains the basic terms of the agreement between the Parties including;
2.1 the details of the seller and purchaser;
2.2 the description of the property on offer;
2.3 the proposed purchase price and modes of payment; and
2.4 any other special term that informed the Agreement between the Parties.
The Letter of Offer/ Letter of Intent is executed by both Parties and it is drafted subject to contract (meaning that it is subject to the Parties execution the Agreement for Sale). It is therefore worth noting that the Letter of Offer/ Letter of Intent comes with an allowable period for execution of the Agreement for Sale. Therefore, if parties fail to execute the Agreement for Sale over the grace period, the Offer lapses.

3. Sale Agreement and Deposit Payment
The Agreement for Sale, as a matter of legal practice, is drafted by the seller’s advocate and presented to the buyer’s advocate for approval. It is important to understand that an Agreement for Sale is created based on the Parties’ agreement as to its commercial terms. However, as a matter of practise, once the agreement has been executed, the agreed deposit is paid by the purchaser through their advocate to the seller’s advocate’s account to hold as stakeholder pending the registration of the Property in favour of the Purchaser.
4. Payment of Land Rates and Land Rent over Property
Buyers should confirm whether the Property they intend to purchase have been assessed for land rates (payable to the county government) and/or land rent (payable to the lands offices). The settlement of the land rates and land rent is a legal obligation of landowners and the seller should clear any pending rent and rates and provide their respective clearance certificates. Of note, the parties apportion the settlement of the land rates and land rent between themselves as at the date of completion.

5. Completion Documents
The Purchaser’s Advocate prepares transfer documents that will be executed by both the buyer and the seller, subject to review by the seller’s Advocate. In turn, the seller’s Advocate is responsible for providing all the Completion Documents necessary to transfer the Property to the Purchaser.
6. Exchange of Documents
Upon receipt of the completion documents from the seller, the buyer is obligated in exchange of the documents, to pay to the seller’s advocates the entire balance. The amount is held as stakeholder pending the successful registration of the Property in favour of the Purchaser.

7. Valuation
With respect to the stamp duty payable, an application for valuation is always made to the government valuer, who makes a site visit to enable him or her to prepare the requisite valuation report.
The payable duty is determined by a government valuer and the valuation is done to determine the value of the land on the open market as at the date of Transfer.

8. Payment of Stamp Duty
It is the responsibility of the buyer to pay the stamp duty subject to the assessment and finding of the Government Valuer.
9. Registration of the Transfer
Once the Stamp Duty is settled, the Completion Documents are booked for registration at the Lands Office. At the completion of this process, the legal and beneficial ownership of the land shall have changed hands to the intended beneficiary. At this point, the seller’s Advocate is free to release to the seller the full purchase price amount that was being held on a stakeholder basis. In exchange of release of the purchase price, the purchaser is given vacant possession over the Property.

Our Property and Real Estate team are always available to assist in all these seemingly daunting steps.
With so many fraudulent cases arising, it is only prudent that you get an Advocate involved from the onset.

Your solution starts here