Treasury secretary Rotich say the companies will be allowed to deduct part of the money they have out in as donation from their tax obligations.
Kenya on February 10 declared famine a national disaster.
The Kenya Red Cross has estimated around 2.7 million people are in need of food aid after low rainfall in October and November and the next rainy season not due before April.
Companies that donate to ease the pain from disasters declared by the President like famine will pay less tax.
Treasury secretary Rotich say the companies will be allowed to deduct part of the money they have out in as donation from their tax obligations.
“I propose to amend the Income Tax Act to allow a deduction for expenditure incurred on donations for the alleviation of distress during national disasters declared by the President,” said Mr Rotich.
“Such donations should be channeled through the Kenya Red Cross, a county government or any other institution responsible for national disaster.”
Kenya on February 10 declared famine a national disaster, calling for aid to counter drought that is posing a major risk to people, livestock and wildlife.
The Kenya Red Cross has estimated around 2.7 million people are in need of food aid after low rainfall in October and November and the next rainy season not due before April.
President Uhuru Kenyatta called for “local and international partners to come in and support the government’s efforts to contain the situation,” a statement from his office said.
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