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Concerns over steep tax incentives

Publish date: 07 October 2019
Issue Number: 844
Diary: IBA Legalbrief Africa
Category: Kenya

Kenya has been urged to distribute its multi-billion shilling tax incentives among local and foreign companies to fast track industrialisation and boost job creation. Leading AU official Ron Osman Omar said a skewed tax regime that targeted local firms ‘is a significant constraint on enterprise and investment’. Nairobi offers major tax incentives in the form of tax credits, deferrals and exemptions, mostly foreign-owned export-oriented firms. The East African reports that the latest data from Kenya Revenue Authority (KRA) shows that tax handouts have increased from US$211m a decade ago to $452m in 2017. ‘Many multinationals continue to enjoy tax-free status in several other African countries, and I'm not against this, but the same regulations could also be granted to local industries,’ Omar told the Business Daily. She was speaking on the side-lines of a two-day industrial policy literacy training for African business journalists organised by the AU and the German development agency GIZ held at the AU’s headquarters in Addis Ababa.

Full East African report