The Kenya government has struck a deal with Singapore that will cut taxes for Kenyans working and operating businesses in the foreign country.
Treasury Cabinet Secretary Henry Rotich and Singapore’s Trade and Industry minister Koh Poh Koon agreement aims to avoid double taxation (DTA) for firms operating in the two countries.
Kenyan companies will now pay taxes only once while trading in the two countries, and so will Singaporean companies operating in Kenya.
“We have had a long negotiation on these documents which we have finally signed today. We hope to see more Singaporean investments set up here in Nairobi and vice versa,” CS Rotich explained.
He conveyed that the deal would eliminate tax uncertainties between the two countries.
[caption caption="Treasury CS Henry Rotich"]
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On his part, Koon stated: “Beyond and above these agreements, Kenya also needs to fix its governance since this has been the basis of Singapore’s progress. We also expect to collaborate on boosting connectivity between the two states.”
Double taxation is an issue in many countries where income may be taxed in the country where it is earned, and then taxed again when it is repatriated in the business' home country.
In some cases, the total tax rate is so high, it makes international business too expensive to pursue.
The DTA between Kenya and Singapore will ensure that businesses pay taxes once promoting foreign investment in the country.
However, before the agreement comes into effect, it has to be ratified by Parliament.
[caption caption="Treasury Secretary Henry Rotich and Singapore Trade and Industry Minister DR Koh Poh Koon during the signing of avoidance of double taxation (DTA) agreement"]
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