Parliament rejects the proposal on tax amnesty for firms seeking to list

Parliament has rejected a proposal that sought to extend tax amnesty to all the firms that intend to list on the Nairobi Securities Exchange (NSE). The proposal was presented by the Nairobi Securities Exchange (NSE) and the Kenya Association of Stockbrokers and Investment Banks ( KASIB).

According to Treasury Finance Bill 2019, tax amnesty only applies to the companies that are being listed on the Growth and Enterprise Segment (GEMS). This is meant to encourage small and medium-sized companies to list on the segment.

The Finance and Planning Committee of the National Assembly rejected the proposal stating that tax amnesty is will result in revenue losses for the government. NSE and KASIB argued that a lot of large firms will be attracted to list on the Exchange if the tax waiver applies to all businesses planning to list.

Despite the relaxed listing rules in the GEMS segment, the NSE has struggled to attract new listings since June 2016. The main market segment has also had no new listing by Initial Public Offer since 2015. Bank of Kigali entered the Nairobi Securities Exchange in 2018 by introduction.