The Finance Act, 2026 introduces new tax rules aimed at improving compliance and accountability in the scrap metal sector.
What Has Changed?
Income earned from the sale of scrap metal is now deemed to be income derived from Kenya where the payment is made by a resident person or a person with a Permanent Establishment (PE) in Kenya.
What Does This Mean?
This gives KRA a clear legal basis to tax income arising from scrap metal transactions in Kenya. It also introduces a 1.5% Withholding Tax (WHT) on the gross amount paid for the purchase of scrap metal.
Buyers Are Required To:
- Deduct the applicable 1.5% Withholding Tax.
- Remit the tax to KRA.
- Issue a Withholding Tax Certificate where applicable.
Who Is Affected?
- Scrap metal dealers
- Scrap metal collectors
- Recycling companies
- Manufacturers purchasing scrap metal
- Any business buying or selling scrap metal
Why This Matters
The scrap metal industry has historically been difficult to monitor due to the high volume of transactions. These new rules are intended to improve tax compliance, enhance transparency and traceability, reduce tax leakage, and bring more participants into the formal tax system.
Stay informed. Stay compliant.
TAX HOME KENYA LIMITED
📱 +254 725 416 982
📧 taxhomekenyalimited24@gmail.com
🌐 taxhomekenya.github.io
Simplifying Your Tax Journey.