The proposed changes in various legislation such as CMA Act, Sacco Act and other tax legislation to accommodate Islamic financial products is an appreciation by the Government of the important role that sharia-compliant financial products can play in our economy.
This also removes uncertainty on tax treatment of such products, thus attracting Foreign Direct Investments (FDI) through floating of products such as sukuk bonds.
Most importantly, it will position Kenya as a financial hub in the region that enhances financial inclusion and by extension economic development.
The Budget also proposes amendment of the Insurance Act to allow for perpetual licensing of insurers from the current annual licensing basis.
This is a positive change, which has been enabled by the risk-based supervision that allows regulators to have a forward-looking view of the financial health of the insurers.
The change will reduce the administrative costs associated with annual application of licences. [brahim Khalif and Thomas Njeru, Deloitte East Africa]
