President Uhuru Kenyatta. [Photo/the-star.co.ke]
The Kenya Revenue Authority has expressed concerns about the agreement that Nairobi signed with Beijing that will see Chinese companies not pay tax on the interest they earn.KRA has warned that Kenya will lose billions of shilling thanks to the agreement.
The two countries appended their signatures to the yet-to-be-enforced agreement on September 21.
Mr. Goerge Obell. the authority's director general in the international tax office, expressed his serious reservations, calling for the agreement to be reviewed with a view to amending it.He vouched for the inclusion of a clause that will obligate China to collect tax on behalf of Kenya.''China has a lot of capital. So they will bring capital into the country and when they are paid interest it is not subject to tax. That is a huge loss.'' Mr. Obell lamented.
The proposal to have China made to collect tax on behalf of Kenya has already been made to KRA to the Treasury.
China is Kenya's biggest bilateral lender.