 Kenyat is considering tax reforms to entice American investors. Hello there, welcome. In today's video I will be explaining to you why Kenya considers tax reforms to entice reluctant Western investors after Washington complained that corruption and a lack of transparency in tax policy discouraged investment in the East African country. Have you ever wondered why many American investors do not invest in Africa? I will be explaining to you why Kenyat is considering tax reform and what its benefit will be. Nairobi also threw out the red carpet for U.S. investors this week even as the U.S. government complained that corruption and lack of a transparent tax policy were discouraging interest in Kenya. These concerns were raised at an American chamber of commerce meeting in Nairobi where President William Ruto was among the prominent speakers. Stay with us to find out more. The Kenyan government is finalizing new tax policy guidelines that have gone through various stakeholder consultations, including inputs from Amcham, the American Chamber of Commerce. This policy that will enhance transparency in our tax regime will take effect by June and will be in place for at least three years, President William Ruto said. Hello there and welcome. You are watching Africa Reloaded and I am James, your host. Stick with me to find out how Kenyat is considering tax reforms to entice African investors. Please take a few seconds to like this video and subscribe to our channel. The president also made an announcement that his government intends to repeal a 1.5% fee on digital services which will serve as an exchange for the disputed global framework suggested by the Organization for Economic Cooperation and Development, OECD, on taxing multinational corporations, which includes a minimum rate of 15%. Although Kenyat had previously rejected the framework that proposed a 15% minimum tax rate on global corporations, President Ruto has changed his tone and Kenyat will now sign on to the OECD deal ahead of its implementation on January 1, 2024. The growth of digital commerce has forced many countries to impose digital services tax measures on income derived in their jurisdictions. Kenyat has also done the same. Following discussions with players in this sector, we have committed to review this tax regime and align it with the two-pillar solution currently being developed by the OECD inclusive framework, he said. The new two-pillar plan is aimed at reforming international taxation rules and also ensuring that multinational enterprises pay a fair share of tax wherever they operate. During the reign of the former administration of President Yuru Kenyatta, Kenyat reserved its backing for the global minimum tax rate, which would have seen the government pause collection of the digital services tax, currently charged at 1.5% of sales made from tech giants such as Google, Facebook, and Amazon. Nairobi's rejection of the OECD minimum tax framework had been an obstacle to negotiations on the free trade between Kenyat and the U.S. In a separate development, President Ruto also encouraged the European Union and its member states to increase investment in African clean energy infrastructure to ensure Africa's most important partner in the energy transition. With the right level of investment, Africa can provide energy access for all by 2030 while reducing total emissions related to energy generation by approximately 8%. He said at the recent Berlin Energy Transition Dialogue. As a result of that, Kenyat on its part is currently looking to partner with Italian investors in a bid to increase its national installed geothermal capacity to 10,000 megawatt by 2037, which is more than 10 times the present capacity of about 949.13 megawatt. There was an agreement written down in October 2022 between Union and Geotermica Italiana, UGI, and the Geothermal Association of Kenya, GAK, under which Italian investors will invest in selected geothermal projects. The International Renewable Energy Agency's Renewable Energy Statistics of 2022 showed that Kenya's 863 megawatt geothermal capacity was at position 7 globally. The U.S. Ambassador Meg Whitman, while speaking at the summit, expressed worry about a disjointed tax regime that was not conducive to American investment. She indicated different tax regimes under various agencies as an impediment to doing business. Kenya must have a consistent, transparent, and fairly administered national tax policy to attract and retain foreign direct investment and accelerate economic development, she said. She also spoke of the issue which has been a persistent threat to a transparent business environment. Without a doubt, corruption is also a critical issue and one that must be addressed for Kenya to reach its full potential in all areas of development, said Whitman. President Rudo responded by steering clear of the corruption bit and chose instead to focus on the uncoordinated and disjointed tax regime that has seen the cost of doing business rise. Kenya is interested in and committed to promoting the best operating environment for business enterprises and that our policy and institutional framework is designed to make Kenya the most competitive investment destination. Also, the national treasury has been on the spot for delaying the AT tax refunds thereby destroying businesses. However, the president outlined new measures to unlock these. The issue of tax refunds has remained a thorn in the flesh of many companies. The government of Kenya is making a policy shift on this matter and as a result, effective June this year, all verified tax refund claims will be payable within six months, said Rudo. If for whatever reason a refund is not made by the Kenya Revenue Authority within this period, the taxpayer can offset their claim against future tax liability without further application to KRA. The president made an announcement that beginning July 1, startups based in Kenya will be exempted from paying taxes on unrealized gains. We are also reviewing our special economic zones and export processing zones laws to remove impediments to attracting new local and foreign investments. The rafts of amendments are under stakeholder consultations and will be in place by July 1. President Rudo also went ahead to address the national ICT policy which requires foreign ICT entities that set up in Kenya to have a 30% domestic equity. A position he said was untenable and has made it impossible for large corporations to invest in Kenya. We will review this position and remove this requirement to facilitate greater investment in our ICT sector. With all these changes on the tax system, Kenya will be the best and most favorable location to invest in the entire continent. Thanks for watching till the end. Please remember to comment, like, share, and subscribe to Africa Reloaded. Also remember to turn on your notification icon to get alerts of newly posted videos.