Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Govt to waive tax on supplies for standard gauge railway

05 February 2015, 08:37

Nairobi - The government said on Wednesday it is developing a framework to assume responsibility for all taxes that will be incurred during the construction of the Standard Gauge Railway (SGR).

National Treasury Deputy Director of Economic Affairs Wanyambura Mwambia told a taxation forum in Nairobi that the framework is necessary as the project is being financed through external funding.

"The project funding agreement precludes the use of project monies for the payment of local taxes including import taxes and Value Added Taxes (VAT) levied on locally purchased goods and services," Mwambia said during a sensitization workshop for business identified to supply goods and services to the SGR.

China has agreed to finance 90 percent of the construction of the 3.8 billion U.S. dollar infrastructure project. The Mombasa- Nairobi standard gauge railway, whose construction has kicked off, is set to beef up local businesses.

The East African Standard Gauge Railway, planned to be operational by 2018, is poised to haul 28 million tonnes of cargo annually between Kenya, Uganda, and Rwanda.

Mwambia said the arrangement will allow project implementation to proceed smoothly within the existing legal confines while also removing the risk of non-compliance with VAT requirements for SGR suppliers.

The East African nation's VAT Act of 2013 does not provide for exemption of VAT on goods and services procured for the SGR project. "So, the taxes will have to be funded by the government from which Kenya Revenue Authority (KRA) is required to collect the money," he said.

KRA Commissioner General John Njiraini said the railway project is one of the key deliverable of the national economic blueprint Vision 2030.

"KRA will therefore facilitate the completion of the project by facilitating the smooth and speedy importation of project materials," said Njiraini, adding that KRA shall institute specific accountability requirements, including regular submission of information specific to SGR supplies.

The KRA official added that the project contractor shall be required to maintain a high level of integrity so as to prevent leakage of SGR supplies into the open market. Njiraini said the list of suppliers will be monitored closely to ensure there is no abuse of this arrangement.

According to the tax agency, the measures are being implemented as interim actions pending decisions regarding a longer term framework to support SGR project tax issues.

"As Kenya implements more and more ambitious projects in its quest to become a middle income country, the need will arise to continually review tax processes to match the new demands," said the commissioner general.

For the latest on national news, politics, sport, entertainment and more follow us on Twitter and like our Facebook page!

- Xinhua


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Jayne Zack
I am in ODM to stay, Busia Depu...

Busia Deputy Governor Kizito Wangalwa told Deputy President William on the face that he was in the Orange Democratic Movement to stay. Read more...

Boda Boda operators in Bahati rai...

Motorbike Boda Boda operators from Bahati Sub county on Tuesday took to the streets of Nakuru’s CBD lamenting over what they term is harassment by patrol police officers in the area. Read more...

Submitted by
Gabriel Ngallah
Human Rights activist lives in fe...

The Human rights fraternity in Mombasa is currently living in fear after the home of one of the vocal human rights champion was invaded on Monday night. Read more...

Submitted by
kel wesh
Poisonous milk powder siezed by K...

The Kenya Revenue Authority has seized two containers with illegal milk powder which had been declared as gypsum board at Mombasa port. Read more...

Submitted by
William Korir
Be ready for protests, Raila warn...

Expect protests if meddling with Auditor General continues, Raila Odinga has said. Read more...

Submitted by
Kenya says will return to interna...

Kenya will return to international markets to borrow when it feels the time is right, National Treasury Cabinet Secretary Henry Rotich said on Tuesday. Read more...