Hostile tax laws worry EAC health investors

Dr Paul Mwaniki, KHF vice-chairman

By MARK OLOO

NAIROBI, KENYA: Investors in East Africa are warning that hostile tax laws will render the East Africa Community (EAC) bloc less attractive for local and direct foreign investments. They say harsh tax regimes, made worse by inefficient tendering and procurement processes, were hurting business in the member countries.

Speaking at a regional business conference in Nairobi yesterday, representatives from Kenya, Rwanda, Uganda, Tanzania and Burundi singled out the health sector as one having huge potential that was impeded by lack of tax incentives.

Health Cabinet Secretary James Macharia said though regional integration was poised to solve some of the concerns through harmonisation of laws and expansion of business innovations, the Government was well aware of the taxation challenges. 

“We are aware of the tax issues even in the health sector. This is why we continue to encourage private-public partnerships and joint venture partnerships to overcome these hurdles,” Macharia told the 3rd East Africa Healthcare Federation conference.

He said he would be meeting Industrialisation Cabinet Secretary Aden Mohammed with a view to ironing out some of the concerns.

Uganda’s Health minister Ruhakana Rugunda urged EAC member countries to take advantage of efficiencies in the private sector to address issues that are likely to render the region unattractive to investments.

“The business community should also exploit the economies of scale as they explore investment opportunities knowing very well that any challenges are not insurmountable,” Rugunda said.

The focus of the conference, hosted by the Kenya Healthcare Federation (KHF), which ends today, is creating business and investment opportunities in healthcare in East Africa. Paul Mwaniki, the KHF vice-chair, asked the Government to review the VAT Act to spur growth in the local pharmaceutical manufacturing sector.

“We also want a review of health laws to ensure equity and efficiency,” Dr Mwaniki, who is also the president of the Pharmaceutical Society of Kenya (PSK), said.