MPs plan review of tax breaks on SGR warehouses

Parliament has clashed with the Executive over plans to extend an array of tax incentives to attract investments in bulk storage along the standard gauge railways.

While the Treasury is seeking a 150 percent investment deduction on investments worth at least Sh10 billion, MPs are plotting to shoot down the plan saying it smacks of a ploy to reward the rich.

“The requirement (Sh10 billion) is a bit too high and will only create more monopolies. We do not want to make laws that benefit some people. We are going to move amendments that will come at the third reading of the bill,” said Mr David Pkosing, chairperson of the National Assembly committee on Transport.

When he appeared before Parliament a week earlier, Treasury Secretary Ukur Yatani defended the tax incentive, arguing it was meant to cushion investors putting up storage facilities of at least 100,000 metric tonnes until they recouped their investments.

Mr Pkosing did not however disclose the changes mooted by his committee.

Efforts to woo storage and logistics facilities investors along the SGR line form a key pillar in Jubilee administration’s medium term plan.

Critics have, however, taken issue with the Nairobi-Naivasha phase terminating at Suswa, especially after China pulled the plug on funding for Suswa-Kisumu phase 2B.

The push for incentive comes amid stiff opposition by freighters protesting the government’s orders that all imported cargo from the Port of Mombasa to Nairobi and beyond be moved by SGR cargo trains in efforts to increase revenues from the new rail. In the 2018/19 year, Kenya Railways raised Sh8.4 billion from the cargo service against the targeted Sh24 billion targeted underlining the struggles faced by the service.