The Kenya Revenue Authority (KRA) has implemented the Income Tax (Charitable Organisations and Donations Exemption) Rules, 2024, which officially took effect on June 18, 2024, under Legal Notice No. 105 of 2024.
The new regulations establish a structured framework for charitable organisations seeking income tax exemption and define the conditions under which donations qualify as tax-deductible under the Income Tax Act.
According to KRA, the rules are meant to enhance compliance, transparency, and accountability among charitable organisations.
“These rules provide clear guidelines on tax exemption under Paragraph 10 of the First Schedule to the Income Tax Act, as well as the deductibility of donations under Section 15(2)(w). Our goal is to streamline the process and ensure that organisations meet their obligations,” KRA stated in a public notice.
The authority emphasized that all new applicants must adhere to the revised framework before being considered for tax exemption.
“Any organisation applying for income tax exemption after June 18, 2024, must comply with the requirements set out in the new rules,” KRA warned, adding that failure to do so will lead to automatic rejection.
For organisations already granted tax exemptions, KRA has given a one-year compliance window until June 18, 2025.
“Organisations that had been granted exemptions before the rules came into force must align with the new requirements by the deadline. Failure to do so may lead to revocation of their tax-exempt status,” the authority clarified.
KRA further stated that all prior tax exemption guidelines contradicting the new regulations are no longer valid.
“Any previous publications or communications on tax exemption and donation deductibility that are inconsistent with these rules are now invalid. Moving forward, only the 2024 rules will apply,” the agency affirmed.
To facilitate a smooth transition, KRA has made the new regulations available on its website and urged affected organisations to review them in detail.
