President Ruto announces tax relief for start-up companies

Start-up companies based in Kenya will effective July 1, 2023 be exempted from paying taxes on unrealised gains, President William Ruto has announced.

Speaking at the Ole Sereni Hotel in Nairobi on Thursday during the American chamber of commerce regional business summit, President Ruto noted that his administration wants to make Kenya an apex innovation centre by attracting investments from start-ups, but a few hindrances remain that are preventing such businesses from realising their full potential.

"I have received complaints that we impose employee benefit tax on allocated shares to employees of start-up companies, even before any value is realised on these shares," said President Ruto.

"The government will exempt start-up companies from paying taxes on such unrealised gains on employee-allocated shares starting 1st July this year."

He added that his administration is committed to promoting the best operating environment for business enterprises by introducing policies designed to make Kenya the most competitive investment destination across the continent.

"I am committed to make Kenya one of the most attractive places to do business. As you may know, Kenya has been ranked the third most attractive place to do business in Africa by the World Bank, under its ease of doing business scheme," said President Ruto.

"We are also reviewing our Special Economic Zones and Export Processing Zones laws to remove impediments to attracting new local and foreign investments. The raft of amendments are under stakeholder consultations and will be in place by 1st July this year."

President Ruto similarly noted that Kenya has one of the most developed financial services sectors in the continent and that the country is ripe for the establishment of an International Financial Centre in Nairobi to attract global financial players.

"To continue to reinforce this strong position, we are working with organisations such as the Financial Actions Task Force (FATF) to ensure Kenya fully complies with the relevant international standards on money laundering and terrorist financing activities, so as to make this International Financial Centre a reality," he said.

The Head of State correspondingly announced that Kenya, the United States government and the American Chamber of Commerce had on Thursday had launched a trilateral business dialogue, to address and resolve the challenges of U.S. investors and businesses in Kenya, in a bid to boost trade among the two nations.

"This new trilateral platform, scheduled to meet every three months, will serve as a key convening body to jointly tackle investment challenges and is a demonstration of the government’s commitment to hearing directly from the U.S. business community," he said.