- September 15, 2023
- Posted by: legaleseblogger
- Category: Related News
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EVELYNE MUSAMBI, Associated Press
Kenya’s President Woos American Tech Companies, but Critics Question Tax Increases
NAIROBI, Kenya (AP) ÔÇö In a bid to attract American tech companies, President William Ruto of Kenya has pledged a business-friendly environment, despite recent tax hikes on domestic businesses. Speaking to leading U.S. technology companies and investors in San Francisco on Friday, President Ruto highlighted investment opportunities in Kenya and praised his government’s “strategic priorities.”
President Ruto assured the audience that Kenya’s tax code provides stability by being simple to enforce, consistent, fair, and predictable. He emphasized that the tax code would remain unchanged for the next three years, offering a secure business environment. Furthermore, he highlighted recent initiatives undertaken by the government, such as the elimination of value-added tax on exported services, removing the tax on stock-based compensation for startup employees, and abolishing the domestic equity requirement for ICT companies.
However, critics argue that the implementation of new and proposed taxes by President Ruto’s government may increase the cost of doing business in Kenya, particularly in the tech sector.
In the first budget of his administration, President Ruto doubled the digital service tax to 3%, specifically targeting foreign tech giants that utilize the internet for marketing and sales. While the government anticipated significant revenue in Kenyan shillings from this tax hike, critics cautioned that it might discourage tech investors from considering Kenya as a viable destination.
Despite these concerns, President Ruto emphasized that Kenya is positioning itself as Africa’s business process outsourcing and creative economy hub, citing high internet penetration and a growing workforce as key advantages.
It is worth noting that in the tech sector, labor laws in Kenya have been the subject of criticism. Companies like Meta (formerly known as Facebook) have faced lawsuits filed by former employees, alleging poor working conditions and low wages for content moderators.
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