The Jamii Milling Complex in Eldoret. PHOTO | COURTESY
Opinion and Analysis
By CLIFFORD OTIENO
The 2015 Economic Survey Report released recently highlighted the performance of the economy in the financial year 2014.
Key highlights included the sectorial performance and the
economic outlook for 2015 which focused on the anticipated economic
trends of the global and domestic economy as well as the various policy
interventions that the Government intends to put in place to spur growth
in the various sectors of the economy.
An area of interest is the policy interventions
aimed at improving trade, specifically, the facilitation of the Special
Economic Zones (SEZs) and the provision of tax and other trade
incentives to the exporters.
The government ought to closely monitor and
facilitate the progress of the development of the SEZ since it is one
area that if properly managed, promises great potential in the growth of
the country’s economy.
This calls for cooperation from all the respective
players in the implementation of the SEZ. Thus, the lawmakers,
implementing agencies and the investors should work together, in their
various roles, to ensure the success of this initiative, for a better
and prosperous tomorrow. Plans are under way to ensure the success of
SEZs.
Incentives
The government has already tabled a Special
Economic Zones Bill that seeks to provide the regulatory framework
within which the licenced special economic zone enterprises, developers
and operators will operate.
The Bill proposes numerous tax incentives for the
aforementioned groups. These incentives include exemption from all
existing taxes and duties payable under the Customs and Excise Act,
Income Tax Act, East African Community Customs Management Act and Value
Added Tax Act on all special economic zone transactions.
In addition, these groups will be exempted from
other exemptions such as stamp duty, advertisement and licence fees
levied by respective county governments, among others.
The development of the SEZs falls under the
Economic Pillar of the Kenya Vision 2030 and is a flagship project of
the Ministry of East African Affairs, Commerce and Tourism. The zones
will be developed in Mombasa, Lamu and Kisumu.
The successful implementation of the SEZ is
expected to accrue a number of benefits to the country. Employment
opportunities are expected to be created with the establishment of the
zones, hence reducing unemployment.
In addition, the establishment of SEZ is expected
to result into other social infrastructural developments, such as the
development of hospitals, schools and townships in the areas where such
establishments will come up.
The writer is a tax consultant at Ernst & Young. The views expressed here are not necessarily those of Ernst & Young
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