The National Assembly passed a motion on Wednesday that was tabled by the Committee on Delegated Legislation seeking to exempt Japanese companies, employees, and consultants from income tax.
The committee’s chair William Kamket said that the move will see the groups working on projects agreed upon between the governments of Kenya and Japan exempted from paying tax.
“The committee recommends that the House approves the exemption of Income Tax from Japanese companies, employees, and consultants in accordance with Section 62 of the Income Tax Act,” Kamket said.
While seconding the motion, the committee vice-chairperson Muriuki Njagagua said that the Japanese government is seeking an exemption of Income Tax for its citizens for the work being done to the people of Kenya.
“Basically, this is for the money that they give to Kenya as grants or loans…they are saying that we have brought this kind of money, exempt our people, our companies, and consultants from paying Income Tax in Kenya,” Njagagua said.
The MP added the same companies, consultants, and the employees are paying their Income Tax back in their country and will be paying the double Income Tax while in Kenya, hence the need to be exempted.
The vice-chair said that there were some of the questions raised by the committee during a virtual meeting with the Treasury CS Ukur Yatani regarding the matter but an agreement was reached.
He added that the Kenyan government will also seek the same Income Tax exemption for Kenyans who are in Japan.
“As a committee, inasmuch as there were questioned raised, do Kenyan companies that do business in Japan get the same kind of exemption? We leave that to the Ministry of Foreign Affairs and the Kenyan government in its totality to negotiate such exemptions.”
According to Njagagua, the benefits that the country will get from the Japanese companies in Kenya are much higher compared to the income tax.
Japan and Kenya have enjoyed close ties, especially during the tenure of former Prime Minister Shinzo Abe.
Kenya secured financial support for key infrastructure projects from Japan including several roads such as Ngong Road, renewable energy projects, water, and the ongoing Special Economic Zone in Dongo Kundu in Mombasa county, among other developments.
