The Finance Act, 2020 introduced a minimum tax of 1% on gross turnover through the introduction of Section 12D to the Income Tax Act.  This was aimed at leveling the operating playfield for business enterprises by ensuring that all persons contribute towards the government’s efforts to mobilize resources for growth and development. Several parties filed constitutional petitions before the High Court challenging its constitutionality and legality.

In September of 2021, the High Court declared the minimum tax to be unconstitutional. Dissatisfied with the judgement of the High Court, the Kenya Revenue Authority (KRA) appealed against the ruling to the Court of Appeal.  However, on 02 December 2022, Kenya’s Court of Appeal held that Section 12D of the Income Tax Act (Minimum Tax) as introduced by the Finance Act, 2020, was null and void to the extent that