Kenyan tax lobby urges removal of tax holidays for foreign companies


A Kenyan tax lobby on Wednesday urged the government to remove tax holidays that are granted to lure foreign companies as a means to boost revenues.

Irene Otieno, national coordinator of National Taxpayers Associations (NTA), said that research indicates that a good business environment characterized by adequate security and affordable electricity is sufficient to attract foreign investors.

“Evidence shows that Kenya is losing a significant part of its tax revenues by giving tax exemptions to foreign companies as compared to the benefits derived from the international firms,” Otieno said during the launch of NTA Strategic Plan 2019/2023 in Nairobi.

Otieno said one of the reasons Kenya struggles to meet its tax revenue targets is what she described as the numerous tax exemptions.

The use of tax holidays to attract foreign entities is not sustainable in the long run because it results in unhealthy competition among countries to offer the lowest tax rates for investors, she said.

Fiscal incentives for foreign firms are also discriminatory because they typically are not extended to local firms, Otieno said.

“The tax exemptions… put local entrepreneurs at a disadvantaged position as compared to their foreign counterparts,” she said. Enditem

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