•He said the Kenya Kwanza government is finalising new tax policy guidelines that will be in place for a minimum of three years.
•The government will also review Digital Services Tax.
The government is committed to creating a conducive environment for businesses to operate, President William Ruto has said.
This, amid heavy investment in the country’s infrastructure that supports industries and businesses at large.
To make Kenya more attractive, President Ruto has assured investors of a more predictable tax regime noting private sector players make long-term investments decisions in an environment with predictable policies, among them tax policies.
Speaking during the American Chamber of Commerce, (AmCham) business summit in Nairobi on Thursday, announced a three-year cycle on changes in taxes, doing away with the traditional changes that have in the past come with the Finance Bill each financial year.
He said the Kenya Kwanza government is finalising new tax policy guidelines that have gone through various stakeholder consultations, including inputs from AmCham.
“This policy that will enhance transparency in our tax regime will take effect by June 2023 and will now be in place for a minimum of three years,” Ruto said.
The government will also review Digital Services Tax, and align it
with the two-pillar solution currently being developed by the Organisation for Economic Cooperation and Development (OECD) inclusive framework.
VAT on exported services will also be removed in the Finance Bill, in the coming budget, in June this year.
The government is also keen to address challenges in VAT refunds.
Effective June this year, all verified tax refund claims will be payable within six months.
“If for whatever reason a refund is not made by the Kenya Revenue Authority within this period, the taxpayer can offset their claim against future tax liability,
without further application to KRA,” Ruto said.
Both local and foreign investors have in the past decried an unpredictable tax regime in the country.
AmCham Kenya CEO Maxwell Okello had on Wednesday said for companies to engage effectively in a particular market, especially multinational companies, they need predictability.
“The biggest challenge we have had from the business environment is the unpredictable policy and regulatory environment. We have been engaging the government and I can say there is a huge progress,” Okello said.
Ruto said Kenya is open for business, noting the government is keen to ensure policies and institutional framework is designed to make the country the most competitive investment destination in the region.
“Kenya is not only open for business, we also mean business,” Ruto said.