Kenya Should Drop Tax Incentives
March 27, 2015 Taxation in Kenya
NAIROBI – International investors coming to kenya are not doing so because of tax incentives, and such tax breaks should be dropped.
In a speech delivered at a conference in Kwale on March 25th the Commissioner General of the Kenya Revenue Authority John Njiraini called for the government to retract the tax breaks provided to foreign investors.
Currently, foreign investors operating in the Export Processing Zones can enjoy a 10 year tax holiday, along with duty free imports, and a 100 percent capital investment deduction on certain activities.
The Commissioner General claimed that the majority of investors who come to the country are not convinced to do so due to the tax breaks but instead enjoy the country’s political stability, security, access to the local and regional market, the low cost of power, and the quality of the labour market.
He added that several academic studies have shown that tax breaks are not effective incentives to attract investors into the country, and, further, he encourage envoys from Kenya to raise awareness of the positives aspects of the country aside from the tax breaks.
Photo By: Kevin Walsh