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 a favorable environment for investment and trade in goods and services.
Kenyan Treasury Minister Ukur Yatani has sought public opinion before signing the agreement.
The latest statistics released by the Kenya Bureau of Statistics (KNBS) show that the country’s trade deficit with China widened to ATS 425.17 billion in the year to March 2022, from ATS 370.58 billion in the previous year, a 15% increase.
In addition, China is Kenya’s second largest external lender after the World Bank, the newspaper said. By the end of May this year, Kenya owed the World Bank ATS 1.19 trillion and China ATS 796.46 billion.
A review of the proposed Double Taxation Agreement (DTA) between Nairobi and Beijing will focus on trade and investment, education and research, and sports.
The DTA will also ensure that Chinese companies that pay income tax on their operations in Kenya will be exempt from paying the same tax in their home country. The same applies to local companies doing business in China.
Kenya has already signed new double taxation agreements with trading partners such as the East African Community and the UAE.
(Editing by Seban Scaria [email protected])