KENYA Law and Practice Contributed by: Anne Kinyanjui and Loice Erambo, DLA Piper Africa, Kenya (IKM)
provident fund at an interest rate that is lower than the prescribed rate of interest. The applicable rate is the difference between the interest rate prescribed by the Commissioner for Domestic Taxes and the actual interest paid on the loan. The rate at time of publica - tion (May 2024) is 14%. • Section 10 1 (c) of ITA imposes deemed interest tax. Deemed interest is an amount of interest equal to the average 91-day treasury bill rate which is deemed to be payable by a resident person or a person having a per - manent establishment in Kenya in respect of any outstanding interest-free loan provided or secured by the non-resident. Withholding tax is also applicable to such deemed inter - est. The Commissioner for Domestic Taxes determines the deemed interest rate and withholding tax rate. The rate at time of publi - cation (May 2024) is 16% and the withholding tax rate is 15%. Banks and other financial institutions licensed under the Banking Act are exempted from paying taxes on deemed interest. • Excise duty at the rate of 20% is imposed on fees charged by financial institutions. This does not apply to interest on loans or returns on loans. 4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning Under the Fourth Schedule of the Constitu - tion, the national government is responsible for developing planning policies and co-ordinating planning by the county governments, and the county governments are responsible for county planning and development.
The principal laws for strategic planning and zoning in Kenya are the Constitution, the Physi - cal Planning Act, the Urban Areas and Cities Act and county legislation. 4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction The Physical Planning Act requires development permission to be obtained prior to the improve - ment of land, which entails the submission of building plans prepared by a qualified planner. The development permit will be issued only if the development complies with zoning laws. The permit may also prescribe conditions for under - taking the development. It is rare for the permit to prescribe requirements on the appearance of the development or method of construction. However, the methods and standards of con - struction are regulated under the NCA Act. 4.3 Regulatory Authorities The following authorities regulate the use and development of real estate in Kenya. • The NLC manages public land on behalf of the national and county governments, and oversees land use planning and development in accordance with the Constitution and the NLC Act. • The county governments regulate zoning and planning pursuant to the Physical Planning Act and county legislation. Land use must comply with National and County Physical and Land Use Development Plans. A devel - opment permit is also required from the county government prior to development. • The National Construction Authority (NCA) regulates contractors and construction in Kenya, in accordance with the NCA Act. Construction projects must be registered with the NCA.
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