Infrastructure bonds could soon be taxed
![](https://breakroom.co.ke/content/images/2024/05/TSR---Taxing-Everything---19052024.png)
The Treasury was in focus last week with the proposed Finance Bill 2024 (aka draft Budget) continuing to display the government's growing austerity measures.
What happened
According to the Finance Bill 2024, the government is proposing to impose a withholding tax on returns from infrastructure bonds with tenure of at least 3 years. Local investors will pay 5% WHT on their interest while foreign investors will pay 15%.
Between the lines
A big incentive for investors in Kenya infrastructure bonds has been their tax-free status. The government's action could reduce investor appetite for these instruments or end up a zero-sum game as investors demand higher returns from GoK.
Should you care?
This news is material if you are an investor in bonds or any collective investment scheme. Stay close to see whether the proposal is adopted & consult your financial advisor in advance on possible impact based on your holdings.