Question 1

What are the KRA wear and tear deduction rates?

Accepted Answer

The Kenya Revenue Authority prescribes wear and tear rates on a reducing-balance basis. Rates vary by asset class: 37.5% for computers and vehicles, 30% for other self-propelling vehicles, 25% for machinery, and 12.5% for buildings and permanent structures. These rates are set under the Income Tax Act Second Schedule.

Question 2

How does the investment deduction for buildings work in Kenya?

Accepted Answer

Kenya offers a 100% investment deduction for new buildings used in manufacturing under a Special Economic Zone or for hotel buildings outside major cities. Standard commercial buildings outside these schemes qualify for the industrial building deduction instead, claimed at prescribed rates over the building's useful life.

Question 3

What is the farm works deduction?

Accepted Answer

Expenditure on farm works such as labour quarters, fencing, dips, boreholes, and land clearing qualifies for a deduction under the Second Schedule. The deduction is typically granted in full in the year of expenditure, encouraging agricultural capital investment across Kenya's farming sector.

Question 4

What are the KRA depreciation class categories (I-IV)?

Accepted Answer

Kenya groups depreciable assets into classes. Class I (37.5%) covers heavy machinery and motor vehicles. Class II (30%) includes other self-propelling vehicles and aircraft. Class III (25%) covers machinery not in other classes. Class IV (12.5%) applies to buildings, docks, and permanent structures.

Question 5

How does the 25% initial industrial building deduction work?

Accepted Answer

Industrial buildings used for manufacturing qualify for an initial deduction of 25% of construction cost in the first year. The remaining 75% is then deducted at 25% on a reducing-balance basis in subsequent years. The building must be used for qualifying industrial purposes under the Income Tax Act.

Kenya Depreciation

Asset Details

Quick Guide

Frequently Asked Questions

Related Calculators

Kenya Depreciation

Asset Details

Quick Guide

Frequently Asked Questions

Related Calculators

Kenya Depreciation

Asset Details

Quick Guide

Frequently Asked Questions

1What are the KRA wear and tear deduction rates?

2How does the investment deduction for buildings work in Kenya?

3What is the farm works deduction?

4What are the KRA depreciation class categories (I-IV)?

5How does the 25% initial industrial building deduction work?

Related Calculators

Kenya Depreciation

Asset Details

Quick Guide

Frequently Asked Questions

1What are the KRA wear and tear deduction rates?

2How does the investment deduction for buildings work in Kenya?

3What is the farm works deduction?

4What are the KRA depreciation class categories (I-IV)?

5How does the 25% initial industrial building deduction work?

Related Calculators