Kenya to scrap tax breaks on startup employee stock options in 2025 Finance Bill
- Kenya proposes to scrap tax breaks on employee stock ownership plans (ESOPs) for early-stage startups.
- The Finance Bill 2025 aims to remove the provision allowing tax deferral on stock received in lieu of salary.
- Employees would be taxed within 30 days of receiving shares, regardless of their ability to sell them.
The proposed changes to ESOP taxation in Kenya could severely undermine the startup ecosystem by making it less attractive for talent. This move seems counterproductive, especially as the country aims to position itself as a regional innovation hub. A more balanced approach is needed to foster growth while ensuring fair tax contributions.
