*Return of the Controversial Definition of Royalties, Rejected Within the Finance Bill 2024* Imagine paying for software to run your business, then being taxed again, as if you had purchased the rights to the software itself. That’s the practical implication of a proposal in the Finance Bill 2025, which seeks to classify regular payments for software use as royalties. This provision, previously dropped from the 2024 Bill due to legal and technical concerns, has resurfaced—albeit with revised language. If enacted, it risks double taxation on standard software transactions, a move that could significantly burden digital businesses and end users. Kenyan jurisprudence and the OECD Model Tax Convention both make a clear distinction between the use of software and the transfer of copyright. Taxing ordinary software purchases as royalties undermines this distinction and contradicts established legal standards. It’s time for Kenya’s tax laws to reflect both legal precedent and the practical realities of the digital economy. Read the finance bill here: https://new.kenyalaw.org/akn/ke/bill/na/2025-05-06/the-finance-bill-2025/eng@2025-05-06