Withholding Tax on Dividends in Kenya 2026: Rates, SACCO Rules

Withholding tax on dividends in Kenya is 5% for resident individuals, and it is a final tax. Non-residents pay 15%.

The company or SACCO deducts it before paying you, so you receive the net amount. Most investors never see the calculation.

The rules changed in 2026. This guide shows the current rates, how SACCO dividends are treated, worked examples and what to do if the wrong rate is applied.

Quick answer

Resident individuals: 5%, final tax.
Non-residents: 15%, unless a tax treaty gives a lower rate.
EAC citizens: the old 5% rate was deleted by the Finance Act 2026.
SACCO dividends on shares: 5% for residents.
Companies owning 12.5% or more of the paying company: exempt.

What Changed in 2026?

The Finance Act 2026 deleted the reduced 5% dividend withholding rate for citizens of East African Community partner states. EY notes this likely stems from a lack of reciprocal mechanisms from other EAC partner states.

In practice, an EAC citizen who is not resident in Kenya is no longer on the 5% rate. The standard non-resident rate applies, subject to any tax treaty. Check the effective date and your treaty position with KRA or a tax adviser.

Dividend Withholding Tax Rates in Kenya (2026)

Investor	Rate	Status
Kenyan resident individual	5%	Final tax
Non-resident individual or foreign company	15%	Final, or the lower treaty rate
Resident company with under 12.5% of voting power	5%	Tax paid on account
Resident company with 12.5% or more of voting power	0%	Exempt
Registered pension and retirement schemes	Exempt	Provide your exemption certificate

If you live in a country that has a double taxation agreement with Kenya, the 15% rate may be lower under the treaty. Apply with the right documents.

What Is Withholding Tax on Dividends?

It is tax deducted at source. The company acts as a collection agent for KRA, so the tax is taken before the dividend reaches your CDS or bank account.

When a listed company such as Safaricom, KCB or Equity declares a dividend, it withholds the tax and pays you the rest. See our NSE dividend calendar for payout dates.

Is Withholding Tax on Dividends a Final Tax?

For most resident individuals, yes.

You don’t owe more income tax on those dividends.
You normally don’t need to include them in your annual return as taxable income. Confirm with KRA or an adviser if your situation is complex.

Resident companies holding under 12.5% treat the 5% as tax paid on account.

Withholding Tax on SACCO Dividends in Kenya

Resident SACCO members are taxed at 5% on dividends, and Africa Check found that rumours of a rise to 15% were false. africacheck

There is an important distinction:

Payment	Treatment
Dividend on share capital	5% withholding tax for residents
Interest on member deposits	Subject to withholding tax, commonly 15% for residents

SACCOs deduct tax at source on both share dividends and deposit interest and remit it to KRA, so you receive the net amount. Your SACCO statement or AGM circular shows the exact deduction. Rates can change, so confirm with KRA.

Example (illustrative): a SACCO pays you KES 10,000 as a dividend on shares. At 5%, KRA gets KES 500 and you receive KES 9,500. If KES 10,000 is deposit interest taxed at 15%, you receive KES 8,500.

See our SACCO comparisons for how SACCO returns compare.

How to Calculate Your Net Dividend

Net dividend = gross dividend − (gross dividend × tax rate)

Example 1: Resident individual (illustrative)

A company declares KES 2.00 per share.
You hold 10,000 shares.
Gross dividend: KES 20,000
Tax at 5%: KES 1,000
Net dividend: KES 19,000

Example 2: Non-resident investor (illustrative)

Gross dividend: KES 100,000
Tax at 15%: KES 15,000
Net dividend: KES 85,000

For a portfolio-wide view, use our NSE Dividend Calculator.

Dividends vs Interest: How They Are Taxed

Dividend withholding tax at 5% for residents is lighter than the 15% charged on money market fund and most interest income.

Income	Typical resident rate
Dividends	5%
Money market fund and most interest income	15%

Compare returns after tax, not before. See our guide to tax on investments in Kenya.

What If the Wrong Rate Was Applied?

If you were charged more than expected, act quickly:

Check your details. Make sure your broker or CDS account shows your correct KRA PIN and residency status.
Ask the share registrar for a withholding tax certificate for the dividend.
Contact KRA through iTax or your tax adviser about a correction or credit. Processing times vary.

Exempt bodies. Registered retirement schemes and approved charities should give their exemption certificate to the registrar before the payment date.

For Companies and SACCOs: Remitting the Tax

You must remit withheld tax to KRA through iTax. A recent guide says most withholding tax categories must be remitted within five working days after deduction. Older articles say the 20th of the following month. Check KRA’s current rule, because late remittance attracts penalties and interest.

Frequently Asked Questions

What is the withholding tax rate on dividends in Kenya?
5% for resident individuals (a final tax) and 15% for non-residents. Check any treaty that may reduce the non-resident rate.

Did the Finance Act 2026 change dividend tax?
Yes. It deleted the reduced 5% rate for EAC citizens. Resident individuals remain at 5%.

Is the tax on SACCO dividends 15%?
No. For residents, dividends on shares are taxed at 5%. A rumour of a 15% rate was found to be false. Interest on deposits is taxed differently.

Do I declare dividends on my KRA return?
For most resident individuals the 5% is final, so you don’t pay further tax on it. Confirm with KRA if unsure.

Do bonus shares attract withholding tax?
Bonus shares are generally not a cash dividend. Confirm special cases with KRA or an adviser.

Is capital gains tax charged on NSE shares?
Capital gains rules for shares have changed, including a 2026 amendment for non-residents. Read our capital gains tax guide and confirm your position with KRA.

What if my KRA PIN isn’t on my CDS account?
Update it with your broker. Incorrect details can lead to the wrong rate being applied.

Can I get a refund of overpaid withholding tax?
If a higher rate was applied in error, ask for a withholding tax certificate and contact KRA. Exempt bodies should provide exemption certificates beforehand.