American risk advisor Declan Galvin who is based in Kenya raised concern over regulation of businesses in Kenya, observing that some of the policies in place are sometimes opaque and contradictory.
According to the Managing Director of Exigent Risk Advisory, the country has been creating new regulations rapidly without thoroughly scrutinizing the existing environment and without retiring existing policies.
Galvin, speaking during an interview with Spice FM, questioned why the Kenyan business space is regulated more than the US, which he argued, more often than not, discourages investors.
“It is an enormous frustration for business especially if they are bringing capital in,” stated Declan while giving examples to justify his point.
Galvin further explained that the taxes instituted by the Government rapidly may affect the predictability and projections of businesses for both local and foreign start-ups which is essential for organisations.
To that end, Galvin called for progressive implementation of regulations to allow businesses to adjust operations.
“If we revise those rapidly overnight or in course of the month as opposed to phasing them out, say this will be a new thing in twelve months or in twenty-four months this will come into place, that creates a certain degree of uncertainty whether you are a Kenyan business or a foreign corporation,” elaborated Declan.
However, despite criticising business policies within the country, Galvin explained that Kenya remains at the helm of investment opportunities in Africa.
The risk advisor heaped praises on the country stating that Kenya has excelled in forging strong bilateral relationships with Western nations instead of predominantly relying on aid.
Galvin's criticism came in the backdrop of the debate surrounding the Finance Bill, 2024 which seeks to introduce a slew of new taxes.
Of particular interest to non-residents is a proposed piece of legislation that will require them to pay 20 per cent of their gross turnover in taxes from income derived from having digital presence in the country.
“Notwithstanding any other provision of this Act, a tax known as significant economic presence tax shall be payable by a non-resident person whose income from the provision of services is derived from or accrues in Kenya through a business carried out over a digital marketplace, read the Bill in part.
