12 November 2009
Nairobi — Kenyans are not the highest taxed people in the world, the Kenya Revenue Authority has said.
Reacting to reports appearing in sections of the press, KRA commissioner-general, Michael Waweru, said the country's tax rates compare favourably at regional, continental and global level."Indeed in most cases, our respective tax rates are lower," Mr Waweru said in a statement issued on Thursday.
"We are still committed to bringing more eligible taxpayers into the tax bracket to ensure that the playing field is level," he said.
Same rates
Singling out various taxes, he said the East African Community (EAC) member states, Kenya, Uganda, Tanzania and Rwanda, have the same rates of corporate and income (PAYE) tax at 30 per cent.
Burundi has the highest rate in the EAC at 35 per cent.
However, Kenya has the lowest value added tax (VAT) rate at 16 per cent compared to Uganda, Tanzania, Rwanda and Burundi.
In addition, some goods and services are zero-rated and some are entirely exempt from VAT.
Also, the country, as other EAC member states, apply the same common external tariff (CET), besides offering incentives to listed companies at the Nairobi Stock Exchange to encourage more listing and local ownership.
In this regard, any company that sells a 25 per cent stake to the public pays 27 per cent in corporate tax, while one selling a 30 per cent stake pays 30 per cent corporate tax and a 40 per cent public shareholding attracts 20 per cent corporate tax.
Across Africa, Ghana at 25 per cent, South Africa at 28 per cent, Botswana at 25 per cent and Egypt at 20 per cent levy a lower corporate tax.
Minerals
But Ghana, South Africa and Botswana charge capital gains tax, which Kenya does not, and have minerals that generate revenue internally.
Kenya is at par with Nigeria but Zambia has the highest rate at 35 per cent and compares favourably with the average of 27.6 per cent for the seven countries.
At 30 per cent (top rate), Kenya's PAYE rate is lower than South Africa's 40 per cent and Zambia's at 35 per cent but at par with Nigeria.
It is higher than Botswana and Ghana whose tax rate is 25 per cent.
Kenya's VAT rate at 16 per cent is lower than Zambia's 17.5 per cent but higher than the 12.5 per cent average for the seven countries.
Its corporate tax is at par with Australia and New Zealand but compares favourably with developed countries such as Canada at 35 per cent and the Netherlands and Sweden at 25.5 per cent and 26.3 per cent respectively.
At par
Its VAT rate of 16 per cent is almost at par with the UK at 15 per cent but lower than Sweden at 25 per cent and the Netherlands at 19 per cent.
However, it is higher than Australia at 10 per cent and Canada at 13 per cent.
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