How money market funds are taxed in Kenya
By Arnold Ochieng · Money market funds hub · paybillke is an independent guide and is not affiliated with any fund manager.
Interest from a Kenyan money market fund has 15% withholding tax taken off before it reaches you. The fund deducts it and pays it to KRA, so you do not file or pay it yourself. Fund yields are usually quoted before this tax, so a fund quoting 10% pays you about 8.5%.
Not tax advice
Worked example
Say you put KES 100,000 into a fund quoting 10% a year, net of fees, and leave it for a year:
- Interest before tax: KES 10,000
- Withholding tax at 15%: KES 1,500
- Interest you keep: KES 8,500, an 8.5% after-tax return
This is simplified. Funds work out interest daily and add it monthly, so the real figure moves a little with compounding and with the rate. Run your own numbers in the MMF calculator.
Where the 15% comes from
KRA's withholding tax guide sets 15% on interest, and Safaricom's Ziidi FAQ says Ziidi income is subject to 15% withholding tax. KRA withholding tax guide.
About this page
Frequently asked
Is the 15% withholding tax final?
For most individual Kenyan residents the fund's deduction settles it. Confirm with KRA if you have other income questions.
Does Ziidi deduct tax too?
Yes. Safaricom says Ziidi income is subject to 15% withholding tax.
Are dollar funds taxed the same?
Yes, 15% on the interest.
Is there a tax-free option?
Infrastructure bonds have been exempt from withholding tax on interest. See our infrastructure bonds guide, and confirm the exemption for the specific bond before you buy.
Do I pay tax when I withdraw?
No. The tax comes off the interest as it is earned, not off withdrawals.