Tax alert - Tax Appeal Tribunal Clarifies Scope of Charitable Tax Exemption

A recent ruling by the Tax Appeals Tribunal in TATC/E1322/2025 provides important clarity on the scope of tax exemption for charitable entities in Kenya.

The Tribunal affirmed that investment income and capital gains may fall within the ambit of tax exemption, provided such income is applied to charitable purposes, reinforcing a consistent interpretation of the law without distinction between income streams where not expressly provided.

PKF is pleased to have acted for the taxpayer in this matter, contributing to a decision that enhances certainty and supports the integrity of the existing tax exemption framework for charitable organisations.

Why this matters:

• Reinforces a holistic application of tax exemption for qualifying charities

• Provides clarity on the interpretation of the law in practice

• Underscores the importance of proper application and documentation of funds

This development is particularly relevant for foundations, PBOs and other charitable institutions navigating tax compliance in Kenya.