Banks escape 20pc KRA tax on overdue loan interest

Banks have secured relief from a tax claim on interest earned from borrowers who delay loan repayments.

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Banks have secured relief from a tax claim on interest earned from borrowers who delay loan repayments after the Tax Appeals Tribunal ruled that default interest is not subject to excise duty.

The ruling gives lenders grounds to challenge similar tax assessments by the Kenya Revenue Authority (KRA), potentially reducing their tax bill on income earned from overdue loans.

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