Executive summary

The Persons with Disabilities Act of 2025 (the Act) came into effect on 27 May 2025, repealing the previous Persons with Disabilities Act of 2003. The new legislation introduces significant provisions regarding tax exemptions and reliefs for persons with disabilities (PWDs). Notably, the Act expands the scope of exemptions and simplifies the assessment process for people with permanent disabilities, a substantial improvement over the repealed 2003 Act.

The Act provides incentives for employers who hire persons with disabilities, allowing them to deduct expenses related to reasonable accommodations and modifications in the workplace. Additionally, it provides exemptions from import duties and value added tax (VAT) for health materials and equipment related to persons with disabilities, further enhancing support for this community.

Background

The Persons with Disabilities Act of 2003, along with The Persons with Disabilities (Income Tax Deductions and Exemptions) Order 2010, formed the legal basis for granting income tax exemptions to persons with disabilities.

The Act builds upon this foundation as well as on constitutional requirements, incorporating broader provisions and streamlining the application process for tax exemptions, thereby enhancing the financial well-being of PWDs in Kenya.

Detailed discussion

The Act introduces several key provisions related to tax exemptions and reliefs. Section 56 of the Act allows all PWDs receiving income to apply to the Cabinet Secretary in charge of finance for exemption from income tax and other levies on such income. Although this provision is not entirely new, the most popular exemption on income has been exemption from Pay As You Earn (PAYE) withholding. PWDs can seek exemptions from withholding tax on other forms of income, such as management fees and consultancy fees, among others.

The Act tasks the Cabinet Secretary responsible for finance with assessing all applications received and, when appropriate, granting exemptions wholly or partially, in accordance with the Income Tax Act, Cap 470 of the Laws of Kenya. In a significant improvement, the Act now exempts individuals with permanent disabilities from future assessments, streamlining the renewal process for exemptions.

The Act maintains previous provisions regarding the exemption from import duty and VAT of materials, articles and equipment, including motor vehicles used by PWDs. However, it has expanded the scope to include exemptions from demurrage charges, port charges and any other government levies that could increase import costs. Additionally, the Act introduces a new provision exempting from import duty and VAT the purchase, importation, transfer or gift of health materials or equipment related to PWDs. This incentive, previously limited to government agencies, is now available to organizations and institutions, broadening the support network for PWDs.

Moreover, the Cabinet Secretary responsible for finance may provide incentives to local manufacturers of assistive devices used by PWDs concerning raw materials, inputs and imported capital equipment. This provision aims to encourage local production and innovation in assistive technologies.

The Act also offers tax deductions for employers who incur reasonable expenses related to accommodating employees with disabilities. This includes modifications to the workplace, mobility aids, assistive devices and adaptive technology. Employers may deduct these expenses from their taxable income.

Lastly, the Act exempts certain materials and devices from postal charges, including braille literature and hearing aids, ensuring that essential resources are accessible to persons with disabilities without additional financial burdens.

Implications

The enactment of the Act represents a significant advancement in the legal framework supporting PWDs in Kenya. By broadening the scope of tax exemptions and simplifying the application process, the Act aims to alleviate the financial challenges that PWDs face. The introduction of incentives for employers encourages the integration of PWDs into the workforce, promoting inclusivity and diversity in employment.

Furthermore, the exemptions related to health materials and equipment facilitate access to essential resources, promoting reasonable accommodations for PWDs.