The government is on record stating that it aims to raise the volume of diaspora remittances to Ksh1 trillion by 2027.
Diaspora remittances are important for building an economy since they are useful in promoting household income, stimulating and enhancing investment and catalysing growth.
Currently, diaspora remittances are the leading forex exchange earner in Kenya, surpassing tea and coffee exports.
To this end, the government is currently implementing three strategies to achieve this goal. Kenyans.co.ke takes a look at these measures and what they mean for the country over the long term.
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Taxation
The government has recently been working to ramp up revenue collection with the Kenya Revenue Authority (KRA) conducting tax sensitisation for Kenyans abroad.
On February 15, KRA will be conducting a tax sensitisation for Kenyans in Qatar which will centre around educating Kenyans working in the Gulf country on tax and customs.
However, Kenyans in the Diaspora have been raising concerns about the plan, expressing double taxation fears. However, Deputy President Rigathi Gachagua has assured Kenyans that the government is looking into the matter.
2. Offering a Diaspora Bond
The government also intends to introduce a diaspora bond that will be sold to Kenyans living abroad.
A diaspora bond whose principal and coupon payments are made in dollars is expected to incentivise Kenyans to invest in the country instead of stashing savings in foreign accounts.
According to the Prime Cabinet Secretary, Musalia Mudavadi the bond will be structured by the World Bank's Multilateral Investment Guarantee Agency (MIGA) and Kenya's National Treasury.
3. Implement a Saving Scheme for Kenyans
The third strategy that the government plans to employ to increase diaspora remittances is through the implementation of a savings scheme. The plan will take off once the Labour Migration and Management Bill, 2023 is passed.
The bill proposes the creation of a voluntary savings scheme that will enable Kenyans to contribute towards investment projects within the country.
However, the bill is in its final stages of preparation and is yet to be passed.
