Treasury Secretary Ukur Yatani said the tax credit is meant to cushion investors until they recover their investments.
The Treasury has shrugged off concerns raised by Members of Parliament over proposals to offer generous tax breaks to investors willing to pump at least Sh10 billion into standard gauge railway (SGR) support facilities.
Instead, Treasury Secretary Ukur Yatani has defended the 150 per cent tax exemption for those investing in SGR bulk storage and handling facilities, arguing it is meant to cushion investors until they recover their investments.
“This is called investment allowance. We want to cushion the investor until he or she recovers his or her investments. “We are supporting the Bill as it is. We support concession of 150 per cent to enable activity at SGR to pick up and make meaning of business which is currently not picking up,” Mr Yatani said.
On Tuesday, Parliament’s Finance and National Planning committee faulted the tax incentive saying risked creating monopoly in the bulk storage and handling facilities “as only few players can meet the threshold.”
On Thursday, Mr Yatani rejected assertions that the exemption could create an imperfect market saying SGR was major infrastructure development whose benefit was long term.
“We have sunk substantial resources on SGR and we have rail that is not fully operation. We are giving investors opportunity to invest along this line on bulk storage. This will create jobs and steer economic growth within railway vicinity. The investors will also be paying other tax to government,” Mr Yatani said.
Mr Yatani appeared before the National Assembly’s committee on Finance and planning to defend proposed amendments to the Business Laws (Amendment) Bill, 2019.
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