Deduction of investment allowance is granted where a person incurs capital expenditure in respect of items listed in the first column of the table below, an investment allowance may be deducted in computing the gains or profits of that person at the corresponding rate specified in the second column, for each year of income.
The provisions come into operation from the date of assent, except SECTION 24E of the repealed section, which relates to incurred expenditure of at least five billion shillings on the construction of bulk storage and handling facilities for supporting the Standard Gauge Railway operations
INVESTMENT ALLOWANCE ON BUILDINGS
Capital Expenditure Rate (%) of Investment Allowance
Hotel building 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Building used for manufacture 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Hospital buildings 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Petroleum or gas storage facilities 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Educational buildings including student hostels 10 per year, on reducing balance
Commercial building 10% per year, on reducing balance
INVESTMENT ALLOWANCE ON MACHINERY
Machinery used for manufacture 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Hospital equipment 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Ships or aircrafts 50 – in the first year of use, thereafter; 25 per year, on reducing balance
Motor vehicles and heavy earth moving equipment 25 per year, on reducing balance
Computer and peripheral computer 25 per year, on reducing balance
Furniture and fittings 10 per year, on reducing balance
Telecommunications equipment 10 per year, on reducing balance
Filming equipment by a local film producer 25 per year, on reducing balance
licensed by the Cabinet Secretary responsible
for filming
Machinery used to undertake operations 50 in the first year of use and 25 per year, on reducing balance
under a prospecting right
Other machinery 10 per year, on reducing balance