Nairobi, Aug. 9 -- The Kenya Revenue Authority (KRA) has lost its bid to deny Consolidated Bank of Kenya a Sh264.9 million bad debt tax deduction tied to unpaid loans by borrowers, marking a significant victory for the industry.

The Tax Appeals Tribunal ruled that the money a bank loses after customers fail to repay loans is a normal cost of running a lending business and can be deducted before tax is calculated.

The tribunal set aside KRA's objection decision of September 18, 2025, finding that the tax authority wrongly treated the written-off loan principal as capital expenditure instead of stock-in-trade. It allowed the bank's appeal.

The dispute originated from a KRA compliance audit covering Consolidated Bank's tax affairs between...