Banks sue to fight 15 percent tax on hedging deals

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The law firm of Millimo, Muthomi and Company Advocates will remain as the legal representatives of KTDA. PHOTO | SHUTTERSTOCK

Commercial banks have moved to court to stop regulations requiring them to pay a 15 percent withholding tax on trading gains made from hedging contracts, opening a new battlefront with the taxman.

From January, the government required foreign investors who gain from hedges –contracts seeking to reduce risk in financial assets or commodities—made by local entities such as banks and airlines to pay a 15 percent tax on the gain.

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Note: The results are not exact but very close to the actual.