The Finance Act, 2026 has introduced an important change affecting non-resident ship owners and charterers earning income from Kenya.
What Has Changed?
Previously, tax on this income was collected through the Withholding Tax (WHT) mechanism. The Finance Act, 2026 removes the WHT mechanism and instead requires the tax to be paid directly.
New Payment Deadline
The tax must now be paid:
- Within five (5) days after payment is received; or
- Before the ship leaves the port of lading;
Whichever happens first.
Why Was This Change Introduced?
- Secure tax collection before ships leave Kenya.
- Reduce the risk of tax remaining unpaid after vessels depart.
- Improve compliance among international shipping operators.
Who Is Affected?
- Non-resident ship owners
- Non-resident charterers
- Shipping agents
- Freight operators
- Cargo handling businesses involved in international shipping
What Should Businesses Do?
- Review their payment processes.
- Calculate the tax early.
- Ensure payment is made before the statutory deadline.
- Coordinate closely with shipping schedules to avoid penalties and delays.
Tax Home Kenya Insight
The Finance Act, 2026 has not removed the tax on non-resident shipping income—it has simply changed how and when it is collected.
With the new timeline linked to the ship's departure, affected businesses should strengthen their compliance processes to avoid unnecessary penalties and delays.
Need help understanding how the Finance Act, 2026 affects your business?
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