President William Ruto has announced the removal of Value Added Tax (VAT) on exported services starting July 1, 2023.
According to the president, this would enhance Kenya’s appeal as a profitable investment destination.
The Value Added Tax on exported services was introduced through Finance Act 2022. Finance Act 2022 reclassified exported services (except Business Process Outsourcing) from exempt to taxable.
One of the key challenges for our business community has been the issue of VAT on exported services. This tax not only renders us uncompetitive, but also inhibits investors seeking to make Kenya their regional or global services hub.Therefore, VAT on exported services will now be removed from the end of June this year.
President William Ruto
In addition, the Special Economic and Export Processing Zones laws will also be evaluated to eliminate any obstacles that may deter the influx of fresh local and foreign investments. The restriction on large corporations investing in Kenya due to the requirement of 30% domestic equity will also undergo scrutiny.
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