President William Ruto on Thursday said that Value Added Tax (VAT) on exported services will be removed starting July 1, 2023.
Speaking at the Ole Sereni Hotel in Nairobi on March 30 during the American Chamber of Commerce Summit, the president said this would make Kenya more lucrative for investment.
“One of the key challenges for our business community has been the issue of VAT on exported services. This tax not only renders us uncompetitive, but it also inhibits investors seeking to make Kenya their regional or global services hub,” he said in his speech.
“Therefore, VAT on exported services will now be removed from the end of June this year,” added.
The Head of State also said the Kenya Revenue Authority (KRA) will be swift in disbursing tax refunds in efforts to encourage good tax payment.
“On the issue of tax refunds, the Government of Kenya is making a policy shift on this matter that will be effective from [end of] June this year. All verified tax refund claims will be payable within six months,” said Dr. Ruto.
In efforts to encourage entrepreneurship, the president said the Government of Kenya will, from July 1 this year, exempt startups from employee benefit taxes until their value is established.
“I have received complaints that we impose ‘employee benefit tax’ on allocated shares to employees of startup companies, even before any value is realised on these shares. The government will exempt startup companies from paying taxes on such unrealised gains on employee-allocated shares starting July 1 this year,” said Ruto.