Court Makes Second Ruling on Taxation of Unexplained Bank Deposits

Hello and welcome to the Money News Roundup Newsletter, where we are covering a new court ruling on the taxation of unexplained bank and mobile money deposits. We also cover the new net pay for salaried Kenyans in the new PAYE changes proposed by Treasury CS John Mbadi.

Court Makes Second Ruling on Taxation of Unexplained Bank Deposits

The Tax Appeals Tribunal has backed the Kenya Revenue Authority (KRA) in taxing unexplained bank and mobile money deposits, strengthening the authority’s fight against tax evasion. 

As reported by the Business Daily, the tribunal ruled that all money flowing into accounts is presumed income unless taxpayers provide documents proving otherwise, placing the burden of proof on account holders.

The ruling followed a dispute with Naivasha hotelier Virginia Wangari, where the KRA sought Ksh6.5 million in tax from deposits lacking supporting records. 

Between 2018 and 2022, her accounts showed total credits of Ksh52.6 million. After applying an 18.49% hospitality industry profit margin, the KRA adjusted the net tax to Ksh6.5 million.

The tribunal confirmed that KRA can use banking analysis where taxpayers file nil or low returns, treating unverified deposits as taxable income. 

Taxpayers must provide reconciliations, source documents, ledgers, or contracts to show that deposits were loans, capital injections, or agency collections. General explanations do not exempt them from tax liability.

The ruling comes amid KRA’s push to integrate its system with banks and M-Pesa, enabling access to transactional data to identify evaders and boost revenue. 

The authority also leverages property, car, Kenya Power, water, and aviation records to track high-value taxpayers who underreport or evade taxes, signalling a more aggressive crackdown on tax cheats.

A similar ruling was also issued last year, where the court upheld that the burden of proof when it comes to unexplained bank deposits rests on the shoulders of the account holder.

Take-Home Pay Set to Increase by Up to Ksh2,127 in Proposed PAYE Changes

As covered by Money254.co.ke, salaried Kenyans could see their take-home pay increase by as much as Ksh2,127 if Treasury CS John Mbadi’s proposed PAYE changes are implemented. 

The tax-free threshold would rise from Ksh24,000 to Ksh30,000, meaning anyone earning Ksh30,000 or below pays zero PAYE. Incomes between Ksh30,001 and Ksh50,000 would see the rate fall from 30% to 25%, benefiting 1.2 million workers.

Under the proposed rates, a Ksh30,000 earner currently pays Ksh731 in tax, which would drop to zero, raising net pay to Ksh30,000 before other deductions. A Ksh40,000 salary would see PAYE cut from Ksh3,153 to Ksh1,475, taking home Ksh34,425, up Ksh1,678. A Ksh50,000 earner currently paying Ksh5,845 would pay Ksh3,718, boosting net pay by Ksh2,127.

Even higher earners will benefit on the first Ksh50,000, providing relief for low- and middle-income Kenyans.

Kenya Cuts China Debt Repayments by Ksh21 Billion After Conversion of SGR Loan to Yuan

Kenya’s debt repayments to China fell by Ksh21.5 billion after converting dollar loans for the Standard Gauge Railway (SGR) project into yuan.

As reported by Bloomberg, the government paid Ksh37.5 billion ($290.7 million) in January, down from Ksh59 billion in the same period last year, according to Controller of Budget Margaret Nyakang’o.

The conversion covered three dollar-denominated loans totalling Ksh642 billion, with two maturities extended to 15 years, including a four-year grace period. Interest rates on the new yuan loans dropped to as low as 3%, saving Kenya Ksh27 billion annually in debt service.

Treasury data shows Kenya owes Ksh1.9 trillion to the World Bank and Ksh1 trillion to eurobond investors.

With the yuan switch, Kenya is reducing currency risk and lowering debt costs.

Car Dealers Warn of Price Hike for Imported Vehicles over Proposed Fumigation Rule

Second-hand vehicle traders in Kenya have opposed a proposal requiring all imported passenger cars to undergo fumigation, warning it will raise costs and pose health risks.

As reported by Eastleigh Voice, the Car Importers Association of Kenya (CIAK) says the move would act as a trade barrier while exposing port workers and buyers to harmful chemicals.

CIAK is pushing for a risk-based inspection system, noting that international standards such as ISPM 41 distinguish between high-risk machinery and low-risk passenger vehicles. Fumigation fees in Kenya currently range from Ksh4,000 to Ksh15,000 for private cars, while pre-shipment fumigation abroad can cost up to Ksh193,500.

The association warns that blanket fumigation violates WTO principles, offers minimal biosecurity benefits, and could expose workers to toxic residues from chemicals such as Methyl Bromide, a known ozone-depleting neurotoxin.

Govt Rolls Out Ksh3,000 Green Number Plates for Electric Vehicles 

The government has rolled out green number plates for electric vehicles as part of the newly unveiled National Electric Mobility Policy, a move aimed at accelerating the shift to cleaner transport. 

As reported by Citizen Digital, Transport CS Davis Chirchir said EV owners will progressively replace their plates at a cost of Ksh3,000 to help create public awareness around e-mobility.

The policy seeks to establish a comprehensive regulatory framework while promoting local assembly and manufacturing of electric vehicles. It will be implemented through a multi-agency steering committee bringing together key ministries, county governments and development partners. 

The government says increased adoption of EVs will help cut emissions, reduce dependence on imported fuel and tap excess geothermal and wind power at night, while lowering vehicle costs and attracting new investment into the growing e-mobility sector.

Cut-Off Points Set to Rise as More 2025 KCSE Candidates Qualify for University

Cut-off points for university courses are expected to rise in the upcoming placement cycle as competition intensifies following an increase in KCSE candidates who qualified for admission. 

KUCCPS Chief Executive Officer Agnes Wahome said the placement exercise, which opens in March, will be guided by analysis of past performance, course demand, and available slots.

As reported by Eastleigh Voice, Wahome said the rise is driven by a sharp increase in candidates who scored a mean grade of C+ and above in the 2025 KCSE examinations. About 270,000 candidates qualified this year, up from 245,000 in 2024, adding pressure on limited university spaces.

She noted that highly competitive programmes such as medicine, law, and engineering will be most affected, urging candidates to study last year’s cut-off trends on the KUCCPS portal and make informed choices.

CA Data Shows Decline in WhatsApp Use as Facebook Tightens Grip

The number of Kenyans using WhatsApp declined slightly to 53.9% in the first quarter of the 2025/26 financial year, down from 54.4% in the previous quarter, according to new data from the Communications Authority of Kenya (CA).

The drop came as rival platforms recorded gains, with Facebook strengthening its lead after growing by 4.9 percentage points to 68.6%. TikTok also expanded its user base, rising by 0.7 percentage points to 30.3%.

According to Capital Business, despite the decline, WhatsApp remains one of Kenya’s two most widely used social media platforms alongside Facebook. The CA attributes increased social media use to higher smartphone adoption, a growing Gen Z population, expanding e-commerce, and more affordable internet.

However, usage of platforms such as Snapchat (0.4%), Telegram (3.4%), email and Opera Mini remains relatively low.

Over 200 Kenyans Make Ksh45.2 Million Through TikTok Ads

Kenyan content creators earned over Ksh45.2 million in the past year through TikTok brand partnerships, highlighting the platform’s growing influence in the country’s digital creator economy. 

TikTok for Business, marking one year since its launch in Kenya, said more than 200 local creators made over Ksh45 million through collaborations with brands.

The growth follows TikTok’s formal entry into the Kenyan market, supported by Aleph Holdings, which manages sales and operations, and Wowzi, which links brands with creators. TikTok says the partnerships have helped businesses in fintech, e-commerce, retail and consumer goods achieve stronger results.

As reported by Citizen Digital, Kilimall reported over 152,000 purchases and a six-fold sales increase, while Godrej Aer logged over 10 million views and maintained a 33% market share for three months. TikTok says the results reflect a shift toward creator-led, mobile-first advertising.