United States Ambassador to Kenya Meg Whitman on Monday, June 3, lauded the Finance Act 2023 noting that it was a gateway for American companies into the country.
Speaking to Kenyans.co.ke editor John Mbati during a celebration to mark the 247th anniversary of U.S. Independence at her residence along Kyuna Road, Whitman noted that the Act had several elements that assured investors of a good investment climate.
In turn, she noted that the Act will enable the Kenyan economy to grow exponentially, a fact she explained had been overlooked by many.
Further, Whitman revealed that the Act would ensure the adoption of a transparent tax regime that would in turn ensure safety for investors.
“It ensures (the Finance Act) 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,” Whitman stated.
The ambassador highlighted the elimination of the one-third domestic equity which she noted had for a long time barred American companies like the Amazon Web Service from making inroads to Kenya.
“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,” noted Whitman.
Another positive aspect of the Act, according to the ambassador, was the removal of the export service Tax. She stated that American companies shied away from outsourcing labour from Kenya because of the tax.
Its removal, she noted, meant that consulting firms and other companies will rush to outsource labour from Kenya.
“The removal of export services tax, for example, call centres, business outsourcing and consulting firms had to pay a tax when they exported their services,” she added.
Whitman highlighted the removal of tax on unrealised gains especially for startups as one of the factors that would entice American investors into the country.
“The next one would be the tax on unrealised 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 monetised," she added.
Kenyan officials who attended the event included Immigration Principal Secretary Gerald Bitok, the Principal Secretary for Labour Geoffrey Kaituko, Prime Cabinet Secretary Musalia Mudavadi and other Ambassadors from Nairobi.
On June 30, High Court Judge Mugure Thande issued conservatory orders suspending the implementation of the Finance Act, 2023 ruling in response to a petition filed by Busia Senator Okiya Omtatah.
The move came after President William Ruto signed the Finance Bill 2023 into law following its approval by the National Assembly on Wednesday, June 21.
