KRA Changes the Process of Filing Taxes for Salaried Individuals; How It Will Work

Hello and welcome to the Money News Roundup Newsletter, where we are covering KRA's new system of filing tax returns, CS Duale's response to the resignation ultimatum, and the drop in profits for insurance companies.

KRA's New System for Filing Taxes

The Kenya Revenue Authority (KRA) Commissioner General, Humphrey Wattanga, has announced that all salaried Kenyans will no longer need to file taxes manually beginning January next year.

In an interview with Business Daily, he explained that the taxman is integrating its internal systems with the goal of easing the compliance process.

How It Will Work: Under the new system, taxpayers will only need to enter their identification numbers into iTax, after which their annual income data will automatically be displayed. This data will be broken down into gross pay and taxes.

Taxpayers will then only be required to validate the data, greatly simplifying the process of making payments.

Catch Up Quick: Previously, taxpayers had to obtain their P9 forms from employers and manually input all their earnings into the system — a process many found tedious. Failure to comply under the outgoing model attracted a penalty of Ksh2,000.

What to Note: The new simplified system will only apply to individuals whose sole source of income is their salary, those earning tax-free income of less than Ksh24,000, or those filing NIL returns beginning next year.

What Wattanga Said: “We want to get to a point where if you are purely an employed person or a nil filer, you don’t have to file your returns. We will be able to prepopulate and present that position to you so that you just validate — and we keep it that simple.” Read More here.

CS Aden Duale: I Am Ready to Defend Myself

Health CS Aden Duale has stated that he will not step aside but is instead prepared to defend himself when given the opportunity. His response followed a 48-hour ultimatum issued by a section of lawmakers calling for his resignation.

“My career in public service spans over 20 years, a significant portion of which was spent in the corridors of Parliament in various leadership roles. My record on integrity and declaration of assets is a matter of public record, detailed in the Hansard from my vetting process,” Duale said, as reported by Kenyans.co.ke.

“I am ready and willing to present myself before any parliamentary committee or oversight body to account for every asset I own,” the CS added.

Earlier, Money254 reported that the Kenya Master Health Facility Registry (KMHFR), hosted on the Ministry of Health’s website, was disabled on Monday evening, blocking public access to crucial information about hospitals across the country. The shutdown came amid growing scrutiny over irregularities in the healthcare sector, including payments to ghost facilities.

Insurance Firms’ Profits Slump as Claims Surge by Ksh27.5 Billion

Insurance companies in Kenya have recorded sharp drops in profits in the first half of 2025 as claims rose by Ksh27.5 billion, offsetting gains from investments and other income streams, Business Daily reports. Data from the Insurance Regulatory Authority (IRA) shows total claims increased to Ksh294.9 billion in the six months to June 2025, up from Ksh267.3 billion a year earlier. The surge was mainly driven by higher motor and medical claims. Liberty Kenya Holdings saw its net profit fall by 58.9 percent to Ksh260 million, while Sanlam Kenya and Old Mutual Holdings both booked underwriting losses. CIC Insurance Group also reported a narrower profit of Ksh638.4 million, down from Ksh709.9 million.

Executives attributed the spike in claims to worsening driving habits, rising medical costs tied to foreign exchange fluctuations, and inefficiencies in the health insurance ecosystem. Old Mutual CEO Arthur Oginga noted that while premiums are priced in local currency, many medical expenses are denominated in foreign currency, creating a mismatch. According to IRA, insurers paid out Ksh114.7 billion in claims between January and June 2025, compared to Ksh89 billion in the same period last year.

Kenya Ranked 94th Globally in Governance Index

Kenya has been ranked 94th out of 120 countries in the 2025 Chandler Good Government Index (CGGI). The country trailed its regional peers, with Rwanda ranked 2nd and Botswana 3rd, while Mauritius retained its position as Africa’s top performer. Rwanda was also recognised as the world’s best-performing low-income nation, showing that national wealth is not a prerequisite for effective governance. The index assessed leadership, institutions, financial stewardship, and global influence, among other factors.

People Daily reports that Africa continues to have the lowest average governance score globally, with only Rwanda and Tanzania improving their rankings between 2021 and 2025. Tanzania moved up to 78th position, a rise attributed to reforms and new policy solutions that strengthened leadership and foresight. Despite these gains, experts noted that Africa still has significant work to do in improving governance quality.

Locally Assembled Vehicle Output Rebounds After Three-Year Decline

The number of locally assembled vehicles in Kenya grew by 16.4 percent in the first half of 2025, reversing a downward trend seen since 2022, Business Daily reports. Kenya National Bureau of Statistics data shows 6,723 units were assembled between January and June, up from 5,778 a year earlier. New car sales also rose sharply by 25 percent to 6,360 units, marking the fastest growth in four years. Isuzu East Africa expanded its market share to 48.4 percent, reinforcing its dominance in the sector.

The rebound is being linked to lower lending costs, a stabilised shilling, and easing inflation, which have boosted consumer demand. Locally assembled vehicles, imported as completely-knocked-down kits, now account for over 80 percent of new car sales, up from less than half in 2017. Analysts note that incentives supporting local assembly have helped sustain jobs, even as firms such as CFAO Mobility Kenya, Simba Corp, and Kenya Vehicle Manufacturers navigate past challenges of currency volatility and higher taxes.

NSSF Contributions Double After Higher Mandatory Deductions

Pension savings with the National Social Security Fund (NSSF) more than doubled in 2024 after the government implemented higher mandatory contributions, Daily Nation reports. Data from the Retirement Benefits Authority (RBA) shows NSSF contributions rose to Ksh59.1 billion from Ksh25.3 billion in 2023, boosted by the second phase of increased statutory deductions.

Overall pension contributions jumped 29 percent to Ksh263.4 billion, up from Ksh204.9 billion the previous year. NSSF’s share of total contributions nearly doubled to 22.4 percent, up from 10.9 percent, reflecting its growing dominance in the pension space at the expense of private schemes. The RBA noted the rise was largely driven by increased employer and member contributions following the higher NSSF rates.

CBK Introduces New Credit Pricing Model Tied to Interbank Benchmark

The Central Bank of Kenya (CBK) has unveiled a new risk-based credit pricing system that will peg lending rates to the Kenya Shilling Overnight Interbank Average (KESONIA), TechCabal reports. From September 1, all new variable rate loans will be tied to KESONIA, with existing loans migrating by February 2026. The formula sets lending rates as KESONIA plus a margin, “K”, which reflects banks’ cost of funds, shareholder returns, and borrower risk. Banks will also be required to publish lending rates and fees for each product on their websites and the CBK’s Total Cost of Credit portal.

The reform, modeled on global benchmarks like SONIA in the UK and SOFR in the US, is aimed at improving transparency, ending opaque pricing, and strengthening monetary policy transmission. While borrowers with stronger credit profiles could benefit from clearer risk-based pricing, weaker borrowers may face higher costs. The first test comes in September, when banks begin issuing loans under the new framework and justify the “K” premium that determines total lending costs.

Kenya Airways Shares Plunge After Sh12.15 Billion Loss

Kenya Airways’ share price dropped 19.8 percent to Ksh4 on Wednesday, its lowest since returning to the Nairobi Securities Exchange in January. According to Business Daily, the decline came a day after the airline announced a half-year net loss of Ksh12.15 billion compared to a profit of Ksh513 million in the same period last year. Investors traded 1.29 million shares, more than double the previous day’s volume.

The carrier attributed the loss to grounded wide-body aircraft due to global spare parts shortages and high engine servicing costs. KQ also struggled to expand its fleet, acquiring only one Boeing 737-800 instead of four planned planes. The setback comes just months after the airline posted its first full-year profit in a decade with a Ksh5.4 billion surplus in 2024.