Economy

MPs approve tax-free deal for Japanese firms, expats

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Parliament during a past session. FILE PHOTO | NMG

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Summary

  • Parliament has exempted Japanese companies, consultants and employees undertaking local projects funded through grants from Tokyo from paying tax.
  • The exemption is in respect of income accruing in or derived from Kenya in the projects under the financing agreements signed between Nairobi and Tokyo.

Parliament has exempted Japanese companies, consultants and employees undertaking local projects funded through grants from Tokyo from paying tax.

The exemption is in respect of income accruing in or derived from Kenya in the projects under the financing agreements signed between Nairobi and Tokyo.

Wednesday, the National Assembly approved the Treasury’s Legal Notice No.15 of 2021 that was published on February 26, 2021. The notice required the approval of the House to take effect.

The approval means that firms currently involved in implementation of 16 ongoing projects valued at Sh328 billion will not pay any tax to the Kenya Revenue Authority (KRA).

Section 13 (2) of the Income Tax Act gives the Treasury Cabinet Secretary power to exempt tax in respect to income accrued from the projects undertaken.

The exemption will apply to the Sh66.9 billion Olkaria V Geothermal Power Development Project, Phase 1 of the Sh38.2 billion Mombasa Special Economic Zone Development Project, Phase 1 and 2 of the Mombasa Port Area Road Development Project (Sh29 billion) and Phase 1 of the Mombasa Port Development Project (Sh22 billion).

Mwea Irrigation Development project (Sh12.99 billion) will also be exempt.