Kenya plans to sign an agreement with China to end double taxation, The Nation newspaper reported.
The agreement, subject to ratification by the Chinese and Kenyan governments, will create an enabling environment for investment and trade in goods and services.
Kenya’s National Treasury Cabinet Secretary, Ukur Yatani, has sought input from citizens ahead of the signing of the deal.
Recent statistics released by the Kenya National Bureau of Statistics (KNBS) showed that the country’s trade deficit with China widened to 425.17 billion shillings in the year to March 2022, compared to 370.58 billion shillings a year ago, a jump of 15%.
Moreover, China is also Kenya’s second largest external lender after the World Bank, according to the newspaper. At the end of May this year, Kenya owed 1.190 billion shillings to the World Bank and 796.46 billion shillings to China.
A review of the planned Double Taxation Agreement (DTA) between Nairobi and Beijing will focus on trade and investment, education and research, and sports.
The DTA will also allow Chinese companies that pay tax on income from their Kenyan operations to get a reprieve by paying the same tax in their home country. So will local companies doing business in China.
Kenya has already entered into new double tax treaties with trading partners such as the East African Community and the United Arab Emirates.
(Edited by Seban Scaria [email protected])