The National Treasury has said negotiations are ongoing to finalise new tax policy guidelines to streamline Kenya's taxation regime and make it more predictable for investors.
Local and foreign investors have previously decried what they described as Kenya's unpredictable tax regime that makes medium and long-term planning difficult.
Speaking at DTB's Economic and Sustainability Forum, Nation Treasury Cabinet Secretary Njuguna Ndung’u said the policy reforms are part of the initiatives being undertaken to for optimal development and protection of the market.
Without giving the implementation timeline, the CS noted that engagements are ongoing to ensure that once tax measures are implemented they should not be able to vary the timing of investors or even the size of investments in the country.
“There are a lot of work that are on the pipeline, I have personally done a lot of work in this area. I have a team that is working to ensure that we have empirical models that will be easily implementable so that we stick to that overtime,” The CS told the Star on the sidelines of the forum.
The second DTB Economic & Sustainability Forum is aimed at engaging policy makers & stakeholders on the prospects, opportunities & challenges for businesses in Kenya.
According to Ndung’u, the plan will ensure that the tax instruments included in the tax policy guidelines do not distort the demand structure of the goods targeted.
“With this I am sure with this we will raise adequate resources from taxation and we will also look at the levies and how to go about them because taxes can’t be changing time by time,” added Ndun’gu.
He said that the policy could not be included in the Finance Act due to time limitation.
“Kenya’s economy is going to reverse on a positive note, by developing our markets and nudging them on optimal paths. Particularly the financial markets, climate development finance and instruments for sustainable financing,” added Ndung’u
From the deliberations it emerged that a more predictable tax regime has been elusive in the country making it hard for private sector players to make long-term investments decisions.
Kenya Private Sector Alliance CEO Carole Kariuki said sudden changes in fiscal policy and regulations divert the industry’s resource allocation from productivity to meeting the costs associated with changes towards fast compliance.
President William Ruto had in March 2023, during a meeting with the American Chamber of Commerce assured investors of a more predictable tax regime that was to take effect by June.
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