Total return from CGT-exempt price gains plus net dividends.
Total return
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Capital gain (tax-free)
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Net dividends
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ROI
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The quiet advantage of buying listed
If you buy shares on the Nairobi Securities Exchange and sell them higher, the profit comes to you whole. The dataset behind this tool treats gains on NSE-listed securities as exempt from capital gains tax, so nothing is shaved off the price gain. That is genuinely different from holding a stake in a private company. Sell unquoted shares at a profit and the same dataset applies capital gains tax at 15 percent on the net gain. So two investors with identical paper profits can keep very different amounts depending only on whether the company is listed. This calculator deliberately models the listed case, which is why the capital gain line carries no tax. Treat that exemption as the structure of the rule rather than a guaranteed permanent figure, and confirm the current position with the Kenya Revenue Authority before acting on a large disposal.
Dividends are not quite free
The other half of your return is income, and income is taxed. When a listed company pays a dividend to a Kenyan resident, it withholds tax at the rate this calculator applies, 5 percent, and sends you the rest. The company does the deducting, so the cash that lands in your account is already net. For most resident shareholders that 5 percent is treated as a final tax, meaning you are not expected to declare the dividend again and pay more on it, though you should confirm your own position with the KRA since holdings above certain sizes and non-resident shareholders are treated differently. The tool takes the gross dividend you enter and applies the 5 percent withholding so the net figure reflects what you actually receive.
A 5,000-share holding from KES 20 to KES 28
Use the defaults to see both halves combine. You buy 5,000 shares at KES 20, a KES 100,000 outlay, sell at KES 28, and collect KES 6,000 in gross dividends along the way. The figures below use the rates this calculator applies. The price gain of KES 8 a share on 5,000 shares is KES 40,000, kept in full because listed gains are exempt as modelled here. The dividend loses 5 percent to withholding, leaving KES 5,700. Total return is KES 45,700 on a KES 100,000 cost, an ROI of 45.7 percent.
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The chart splits that total return into its two sources, showing how much of the 45.7 percent comes from the tax-free price move versus the smaller net dividend.
Read the ROI for what it is
That 45.7 percent is a total return over your whole holding period, not a yearly rate. The tool does not annualise. If the journey from KES 20 to KES 28 took five years, the per-year return is far lower than 45.7 percent, and if it took eight months it is far higher. Before you compare this against a money-market fund or a fixed deposit quoted in annual terms, divide mentally by the number of years you held, or you will flatter the share. The calculator also assumes you actually sold at the sell price you typed. Unrealised paper gains are not taxed and not banked, so a return you have not sold into can still evaporate.
A cost the tool leaves out
One honest limitation: the calculator measures the investment return on the share itself and does not deduct brokerage commission, the regulatory levies on a trade, or any transaction charges. On a KES 100,000 round trip these are usually small, but they do nibble the ROI, and on frequent trading they add up. If you want a truer net figure, shave your broker's all-in rate off both the buy and the sell before you read the result. This is a back-of-envelope return tool for an NSE position, aimed at retail investors weighing a holding, not a contract note.
Does the 5% withholding change if I own a big stake?
It can. The 5 percent rate this calculator applies is the common resident dividend withholding, but the tax treatment of dividends paid to a shareholder holding a large stake, for example a company with a substantial controlling interest, can differ, and dividends paid to non-residents are withheld at a higher rate. This tool assumes an ordinary resident shareholder. If you sit outside that, confirm the rate that applies to you with the KRA rather than relying on the default here.
If I reinvest dividends, what return should I enter?
Enter the gross dividends you were credited even if you used them to buy more shares. Reinvesting does not change the tax: the 5 percent is still withheld first, and you reinvest the net. The cleaner approach for a reinvested holding is to track each purchase separately, because your overall cost base rises with every reinvestment and the simple buy-price field here assumes a single entry price.