Taxes and Charges on Shares in Kenya Explained Simply (2026 Guide)
Taxes and Charges on Shares in Kenya Explained Simply
A practical, investor-first guide for the Kenyan stock market
TL;DR – Quick Summary
- Capital Gains Tax (CGT): 15% on profits for unlisted/private shares; NSE-listed shares are exempt
- Dividend Tax: 5% withholding for resident individuals
- Other charges: Brokerage, NSE levy, CMA levy, CDSC fees
- No tax on losses, but losses cannot offset gains
- Taxes matter most when you exit, not when you buy
Why Every Kenyan Investor Must Understand Share Taxes
Many Kenyan investors focus on which shares to buy and ignore how taxes and charges quietly reduce returns.
Taxes don’t kill wealth. Poor planning does. When you understand how shares are taxed in Kenya, you price exits better, compare investments accurately, and avoid unpleasant surprises.
1. Capital Gains Tax (CGT) on Shares in Kenya
What Is Capital Gains Tax?
Capital Gains Tax is charged on the profit you make when you sell shares at a higher price than you bought them.
Buying shares alone does not trigger tax.
Who Pays CGT?
NSE-listed shares: Exempt from CGT. Profits from companies traded on the Nairobi Securities Exchange (e.g., Safaricom, Equity, KCB) are not taxed.
Unlisted/private shares: CGT applies at 15% on net profit.
CGT Calculation Example (Unlisted Share)
| Item | Amount (KES) |
|---|---|
| Buy price | 100,000 |
| Sell price | 150,000 |
| Capital gain | 50,000 |
| CGT @ 15% | 7,500 |
| Net profit | 42,500 |
Losses are not taxed, but they cannot offset gains.
2. Dividend Withholding Tax in Kenya
When a company pays dividends, tax is deducted at source before you receive the money.
| Investor Type | Tax Rate |
|---|---|
| Resident individual | 5% |
| Resident company | 0% |
| Non-resident investor | 10% |
Dividend tax is a final tax. You do not declare it again.
Related reading: Why long-term investing works in share markets
3. Brokerage Fees (Not Taxes, But Still Costly)
Brokerage fees are charged by your stockbroker and are usually capped at:
- 1.5% per trade
- Charged on both buying and selling
Frequent trading magnifies brokerage costs and reduces net returns.
4. NSE and CMA Levies
- NSE levy: 0.03% of transaction value
- CMA levy: 0.01% of transaction value
These levies fund market operations and regulation.
5. CDSC Charges
The Central Depository & Settlement Corporation (CDSC) holds your shares electronically.
| Charge | Typical Cost |
|---|---|
| Account maintenance | KES 50–100 per month |
| Share transfers | Varies |
6. Total Cost of Trading Shares in Kenya
When combined, trading costs include:
- Brokerage (~1.5%)
- NSE levy (0.03%)
- CMA levy (0.01%)
- CDSC charges
- CGT (15% on unlisted shares; NSE-listed shares are exempt)
Overtrading silently destroys returns.
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About the Author
Postine Ngeli is a Kenyan investment researcher and financial markets educator focused on simplifying shares, money market funds and disciplined long-term investing.
Disclaimer
This article is for educational purposes only and does not constitute investment, tax or legal advice. Tax laws may change. Always consult a licensed professional before making decisions.
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