Kenya exempts transfers of a going concern and adds fertilizer, pest-control and ethanol exemptions to the VAT First Schedule

What changed in detail

Section 21 of the Tax Laws (Amendment) Act, 2024 (No. 12 of 2024, Kenya Gazette Supplement No. 215 of 13 December 2024; assented 11 December 2024; commenced 27 December 2024) amends the First Schedule (exempt supplies) to the VAT Act, CAP 476.

In Part II it inserts paragraph 35: transfer of a business as a going concern.

In Part I it:

• inserts paragraphs 149 to 154: imported inputs and raw materials for manufacturers of agricultural pest control products; agricultural pest control products; fertilizers of Chapter 31; inputs or raw materials for fertilizer manufacturers; denatured ethanol of tariff 2207.20.00; and goods of Chapters 5407 and 6309 imported as raw materials for textile manufacture, each on the relevant Cabinet Secretary’s recommendation or approval where stated;
• replaces paragraph 57 (goods for official use by the Kenya Defence Forces, the Defence Forces Welfare Services, the National Intelligence Service and the National Police Service) and paragraph 101 (beverages supplied to the Defence Forces Welfare Services);
• replaces paragraph 69 (tariff 4703.21.00 for diaper and sanitary-product manufacture), deletes paragraphs 70 and 114, and replaces the proviso to paragraph 146.

The pest-control and fertilizer items moved here from the zero-rated Second Schedule under section 22 of the same Act.

What it means

The going-concern exemption is the item with the widest reach: a business sale in Kenya no longer carries VAT on the transferred assets, which removes a cash-flow cost from acquisitions. Other parts of the amendment did not last. The Finance Act 2025 (ke-vat-fa2025-first-schedule) deleted paragraph 154 (textile raw materials) six months later, replaced paragraph 101 again and cut off the paragraph 146 investment exemption at 27 December 2025. The Finance Act 2026 (s.32) then replaced paragraph 146 again from 1 July 2026, with a new investment exemption and no end date. Read this record as the December 2024 position, superseded in part, not as the current schedule.