Corporate Tax Comparison between Kenya and Uganda Implication for Trade

Description

This paper compares corporate taxation in Kenya and Uganda for the fiscal year 2024/2025. The objectives were threefold: to review the corporate tax frameworks of each country, to test for numerical differences in key parameters, and to examine sectoral implications. Data were drawn from secondary sources, including the Finance Act 2025 (Kenya), the Income Tax (Amendment) Bill 2025 (Uganda), and PwC/KPMG tax summaries. Using descriptive tabulation and Welch’s unequal variance t-test, the study finds significant differences in statutory provisions. Uganda applies higher excises, withholding taxes, and capital gains charges, while Kenya offers more investor-friendly measures, notably indefinite loss carry-forward and lower dividend withholding. These disparities carry sectoral effects: Uganda’s fuel excises increase costs for automobile and FMCG sectors, whereas Kenya’s reinvestment incentives enhance competitiveness in energy and agribusiness. The findings confirm that corporate tax differences shape trade and investment outcomes, highlighting the need for regional coordination.