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Stamp Duty Act

The Act Provides For The levying And Management Of Stamp Duties. It Applies To Fees And Penalties Which Are Directed To Be Collected By Means Of Stamp Under Any Written Law. Officers May Thus Be Appointed For Collecting Stamp Duty By The Kenya Revenue Authority.

Subject to the Act and any other law, any instrument specified in the schedule is chargeable with the stamp duty provided in that schedule. Any instrument, unless prepared on already stamped material, shall be done so, within thirty days of execution.

Under Section 10A, land must be valued by the Chief Government Valuer before it is sold to determine its open market value for assessment of stamp duty.

For cancellation adhesive stamps are used. The maker of an instrument is required to cancel the stamp by writing his name/initials over the stamp to ensure the stamp cannot be reused. Any instrument denoted by adhesive stamp is not deemed to have been stamped unless the adhesive stamp is cancelled.

Offences relating to adhesive stamps include failure to cancel the stamp - a fine of KShs 5,000; defacement of the stampa fine of KShs 2000; fraud in relation to a stamp – a fine of KShs 20,000.

A taxpayer may apply to have the Collector assess whether an instrument is liable for stamp duty and, if so, the amount of duty chargeable. The applicant may appeal the assessment to the High Court as provided under Section 18.

Unstamped instruments are not admissible in evidence. No instruments chargeable with stamp duty can be received in evidence except in criminal proceedings and civil proceedings by a collector to recover stamp duty unless duly stamped.

  1. Agreements

Any instrument not being a bill of exchange is deemed to be an agreement when issued on deposit of any share certificate. Section 31 also provides that any goods bought on hire purchase are charged with duty as an agreement.

  1. Bill of Exchange and promissory notes

The act has defined bill of exchange to include draft, cheque and letter of credit or document entitling a person payment by another person or sum of money. On the other hand promissory note includes a document or writing containing a promise to pay any sum of money. Any foreign bill of exchange or promissory note must have duty paid on it before it is presented for payment.

  1. Chattels Transfer

No instrument can be registered under chattels transfer act unless the original is stamped and produced to the registrar.

  1. Companies

The Act provides that Stamp Duty on capital of companies is charged ad valorem on the nominal share capital or the increase in share capital as reported in the statement of amount delivered to the registrar of companies.

  1. Conveyance on Sale

A conveyance on sale is defined by the act as any instrument or court order transferring property or an interest in property, pursuant to a sale, to the buyer or anyone on his behalf. It also includes a court order for foreclosure and a vesting order by a court.

Conveyance on sale is computed:

Section 44

For shares/securities

If the price is paid in marketable shares - ad valorem duty on the value of the shares. If the price is paid in non-marketable shares - ad valorem duty on the amount due for the principal and interest on the shares.

Section 45

For periodic payment of price

If it total payment can be known beforehand - ad valorem duty on the total amount. If instalments are for a period exceeding 20 years or an indefinite period - ad valorem duty on amount payable for the first 20 years. If instalment payable for a lifetime - ad valorem duty on the amount for the first 12 years.

Section 47

Where price is a debt or charge

The debt or charge is deemed to be the amount on which ad valorem duty is charged.

Section 52

For gifts



Any voluntary gift is charged stamp duty as if it was a conveyance. The actual value of the property is deemed to be the amount on which ad valorem duty is charged. However a gift to a statutory body or a charity is exempt from stamp duty.


  1. Leases and Licenses

Any agreement for a lease is charged with the same stamp duty as if it were an actual lease. Where of the consideration is rent duty is charged as per the schedule to the act. In other cases, duty is charged as if it were conveyance for the amount in consideration. Where the rent is collected in terms of produce or goods, duty is charge don the value of the crops or goods. If the lease cannot be valued, the Collector may under Section 56 charge duty as if it were a gift under Section 52 or he may charge duty at a flat rate of KES 1000.00.For licenses, duty is charged as if the licence were a lease.

  1. Others

Others particular instruments provided for under the act which should be duly stamped include;

ü Receipts

ü Stock certificates to bearers

ü Settlements

ü Share warrants

ü Mortgages

ü Insurance policies

ü Marketable securities


Part IV of the Act provides for relief from stamp duty in the following instance:

Section 95

Reconstruction/Amalgamation of companies.

Section 96

Transfers of any property between related companies

Section 97

Documents of building societies registered under The Building Societies Act


Part V of the Act also provides for allowances for stamps in the following cases:

S. 98

Spoiled stamps

An application for allowance must be made in 90 days of spoilage of the stamp or any further time that the collector may allow.

An allowance is made by either by replacement of stamp; issue of a stamps of similar value; or repayment of 95% of the value of the stamp

S. 96

Misused stamps

This applies where a stamp of insufficient amount or improper description is mistakenly used. An application must be made within 1 year of the date of the document.

S. 97

Stamps not needed

Applies where a person has no immediate use for a stamp. The applicant must prove a bonafide intention to use the stamp; that the price was paid in full; and, application was made in 180 days

An allowance is made by repaying 75% of the stamp value; or, if applicant is a stamp vendor – 100% of the stamp value

  1. Discontinuance of dies

Where a senior collector of stamps determines discontinuation of a die, it should be published in the Gazette. One month after the notice the new die shall be deemed lawful.

  1. Duty void conditions and agreements

Any condition in a contract framed to bar an objection on the ground of insufficient/unpaid stamp duty or attempting to indemnify or assume liability for failure to pay stamp duty is void.

  1. Compounding duty on cheques

A banker and senior collector of stamps can enter into an agreement as to the composition of the stamp duty on unstamped cheques under the conditions provided for in section 105 of the act.

  1. Power to exempt instruments

Under section 106, the Cabinet secretary may with recommendation from CS for Lands, exempt certain instruments stamp duty. The exemption must be in the public interest and duly gazetted. This does not apply to instruments which stamp duty has already been paid and duly stamped.

  1. Responsibility for loss or damage of instrument

A person sending any instrument to a collector that is lost, damaged or destroyed during transmission, shall not be held liable for the loss, damage or destruction. In this case, an authenticated copy of the document is admissible in evidence.

  1. Administration of oath by collector

Section 110 gives the power to collector to administer any oath or affirmation necessary for the purposes of the act.





Execution of an instrument negligently by omitting facts and circumstances with intent to defraud the government

Fine not exceeding KES 100,000.


Refusal to cancel adhesive stamps

Fine not exceeding KES 5000


Impairing an adhesive stamp before use

Fine not exceeding KES 2,000


Fraudulent removal of stamps from any instrument and fixes it to another instrument, or sells the removed stamp.

Fine not exceeding KES 20,000


Improper stamping of an instrument

Penalty of KES 10,000


Evasion of duty by splitting

Fine not exceeding KES 5000


Person who issues, transfers, endorses, negotiates or presents a bill of exchange or promissory note not stamped

Fine not exceeding KES 5000


Failure to execute contract notes

Fine not exceeding KES 10,000


issuing, assigning or transferring among others a security not duly stamped

Fine not exceeding KES 5000.



Assuring unstamped policy of insurance

Fine not exceeding KES 50,000


Receiving or taking credit for unstamped policy

Fine not exceeding KES 200,000


Not drawing full number of bills or marine policies purporting to be in sets

Fine not exceeding KES 100,000


Postdating bills for other devices to defraud the revenue

Fine not exceeding KES 100,000s


Penalty for frauds in relation to stamp duties with intent to defraud the government

Imprisonment for a term not exceeding one year, or fine not exceeding KES 100,000


Destruction of any book of account or other instrument for the purpose of evading stamp duty

Imprisonment for not more than one year or fine not exceeding KES 100,000


Failure of director, manager, officer or partner of corporate bodies and firms to fulfil an obligation under the act

Fine not exceeding KES 50,000


Obstruction of inspection of books of accounts as authorized by a magistrate

Fine not exceeding KES 20,000

Section 117 of the act provides for exemptions from stamp duty among others as follows:

v Instrument executed by or on behalf of government

v Bill of exchange or promissory note made and stamped in Uganda or Tanzania and presented for payment in Kenya.

v Transfer of shares in stock or funds of the government organization

v Conveyance or transfer of any stock or funds from the government, Government of Uganda or Tanzania

v Bond to public officer in due of his duties

v Instruments for sale or transfer of land for construction or expansion of educational institutions

v Instruments specified in the schedule


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