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Kenya’s tax ranking improves as lower SME taxes proposed

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Small and medium sized enterprises could yet benefit from a proposal by the East African Community and Regional Development docket which along with the National Treasury is exploring a 25% tax rate for SMEs in order to allow ease of doing business in the country.

Down from 30%, the proposed new tax rate is by EAC Cabinet Secretary Adan Mohamed who leads Kenya’s Doing Business reform programme.

This comes on the back of the launch of the Africa Paying Taxes Report by the World Bank and PriceWaterHouse Coopers (PwC). In the survey released on December 6, Kenya’s rank in paying taxes jumped from 125 to 91.

Speaking at the launch, CS Adan said the country would continue to work so as to improve its ranking on the list.

The EAC minister said that some of the efforts not captured in the report but which will reflect next year include reducing the procedures on paying taxes from 25 steps to 14 processes.

“We have other measures that we are working on with various counties that are not part of the World Bank report such as elimination of numerous levies that make us uncompetitive and we hope these will make it easy to do business especially for the small and medium businesses,” he said.

The country is also improving its i-tax system by reducing the timing taken to pay taxes from the current 180 hours measured by the World Bank to less than 100 hours.

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