Kenya Cancels Upcoming Capital Gains Tax
June 23, 2013 Taxation in Kenya
NAIROBI – Kenya has backtracked on the implementation of a new capital gains tax, after the initial announcement of the measure sent shock waves through the national stock market.
In a speech delivered in parliament on June 21st the Economic Secretary of Kenya Geoffrey Mwau announced that the government is backing down on its earlier plan to implement a capital gains tax, saying that further consultation need to be conducted with the public before launching the measure.
The capital gains tax was originally announced two weeks ago during the presentation of the national budget plan, with the anticipated revenues already being earmarked to fund increased government spending on development projects and infrastructure improvements.
Some taxation experts have suggested that the government’s reversal on the tax is intended to provide a boost to the country’s stock market and property sector, both of which took a significant hit since the announcement of the tax.
Reassuring investors that the tax will not be implemented in the near future, the Economic Secretary even said that the “…we have not even worked out the areas to be taxed”, adding that investors should not make any decisions regarding their funds based on speculation on the future of a capital gains tax.
Photo by Oxfam International