Meg Whitman, the United States Ambassador to Kenya has declared support for the Finance Act 2023, emphasizing its significance as a gateway for American companies to enter the country.
She pointed out that the Act would facilitate exponential growth in the Kenyan economy, a fact that had been overlooked by many.
Whitman further said that the Act would establish a transparent tax regime, ensuring the safety of investors.
“It ensures a tax regime that is transparent and consistent and will stay in place for some period of time and give Americans safety on investing in the country,” she said.
The ambassador highlighted the elimination of the one-third domestic equity rule, which had long prevented American companies such as Amazon Web Services (AWS) from establishing a presence in Kenya.
She noted, “One of the most important elements of the Finance Act that has been overlooked is the changes that this administration made to the investment climate.
A few examples are the elimination of the one-third domestic equity rule which kept companies like Amazon Web Services (AWS) from coming into Kenya.”
Another positive aspect of the Act, according to Whitman, was the removal of the export service tax.
She explained that American companies had been reluctant to outsource labor from Kenya due to this tax.
With its removal, consulting firms and other companies would eagerly engage in outsourcing labor from Kenya.
She added, “The removal of export services tax, for example, call centers, business outsourcing, and consulting firms had to pay a tax when they exported their services.”
Whitman also highlighted the removal of tax on unrealized gains, particularly for startup companies, as a factor that would attract American investors to the country.
She said, “The next one would be the tax on unrealized gains for startup companies those less than a million dollars or eight years old. For the startup, the meaning you got it you had to pay taxes, now you don’t have to pay taxes until it is monetized.”
The High Court last week suspended the implementation of the Act and pending the hearing and determination of a lawsuit that was sponsored by Okiyah Omtatah.
Lady Justice M Thande directed the implementation of the law to be put on hold, slamming breaks on President William Ruto’s plan to raise additional funds through new taxes.
Omtatah had challenged the legality of the Bill, saying that it contravened the law since it was being led by the President.
The Busia Senator singled out 30 sections that he says contravened the law on taxation matters.
