The Kenya Revenue Authority (KRA) has officially implemented the Income Tax (Charitable Organisations and Donations Exemption) Rules, 2024, which took effect on June 18, 2024.
The new regulations set forth requirements for income tax exemptions and provide guidelines for the deductibility of expenditures on donations.
In a public notice, KRA stated that the new rules are designed to streamline the process of obtaining income tax exemptions for charitable organizations.
"Applications for Income Tax exemption received after the effective date of the Rules should comply with the requirements prescribed in the Rules," the notice read.
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The guidelines also address the status of organizations that had already been granted exemptions before the new rules took effect.
The organizations are required to align with the updated requirements by June 18, 2025.
"Organisations that had been granted exemptions prior to the coming into force of the Rules should comply with the requirements prescribed in the Rules by 18th June 2025 in line with the transition period of one year provided for in Rule 27.
"Failure to demonstrate compliance with the Rules by the prescribed date may result in revocation of the exemption in line with Rule 20," the notice warned.
KRA clarified that any previous publications or communications on income tax exemptions that contradict the new rules are now considered invalid.
The authority urged charitable organizations and donors to familiarise themselves with the updated regulations to ensure compliance.
The new rules are accessible on the KRA website, and taxpayers seeking clarification are advised to visit the nearest Tax Service Office (TSO) or reach out through the KRA contact centre.
