Kenya Approves Capital Gains Tax
September 17, 2014 Taxation in Kenya
NAIROBI – Kenya will once again levy a capital gains tax, despite warnings that such a measure could hamper the country’s economic growth.
In a statement issued on September 14th the government of Kenya confirmed that a new capital gains tax shall be implemented in the country from January 1st next year.
The upcoming tax will be levied at a rate of 5 percent, and is expected to raise as much as USD 85 million per year to be used to fund new development projects aimed at boosting economic growth and creating more jobs in Kenya.
Despite the potential benefits that the tax may have on the country, some experts have warned that imposing a capital gains tax may have unintended negative consequences on the country, as it may push away foreign investors, and may slow down the rapid growth of the country’s capital and property markets.
This is not the first time that Kenya will impose a tax on capital gains, as a previous incarnation of the tax was charged up to 1985, until it was cut in order to boost foreign investment.
Photo By: Brian Snelson