Kenya to resolve tax impasse with Japan ‘in four months’
President William Ruto and Japan’s Prime Minister Fumio Kishida walk to the podium for a joint press conference after a meeting at State House in Nairobi on May 3, 2023.
Kenya will in four months’ time resolve double taxation concerns that have affected projects funded by Japan.
The standoff on double taxation has blocked Sh10 billion in financing for several projects funded by Japan.
Speaking during a visit by Japan’s Prime Minister Fumio Kishida at State House in Nairobi, President William Ruto stated that Kenya is exploring ways to unlock the stalemate and allow the projects to operate smoothly.
“The government of Kenya is going to resolve the tax issues around the support of Sh10 billion that was extended to us to extend the development of Kemri (Kenya Medical Research Institute), to support the development of Ahero irrigation scheme and one other project. The government of Kenya is going to resolve the tax issues that went to court in the next four months so that we can tap into the resources that were made available to us,” said President Ruto.
“We are pursuing the expeditious resolution of this matter within the due processes of relevant institutions,” he added.
In May 2021, the National Assembly voted to exempt Japanese companies, employees and consultants from income tax.
Diaspora settlements
President Ruto further announced that the two countries will promote economic development by utilising diaspora settlements and aligning the curricula of their respective countries, allowing more Kenyans to obtain highly-skilled and high-quality job opportunities in Japan.
“We agreed to align the curriculum of our two countries so that more Kenyans access skilled and quality jobs in Japan,” said President Ruto. He lauded Japan for investing in Kenya’s infrastructure and geothermal power generation, and its leadership in the climate agenda.
“Japan’s commitment of Sh6.5 trillion to climate finance for developing countries between 2021 and 2025 is commendable,” he said.
Both leaders were also of the opinion that Kenya, the Intergovernmental Authority on Development (Igad), and the African Union require support to settle the dispute in Sudan.
“We call for an immediate cessation of hostilities without preconditions and assure the safety of all civilians,” said Mr Fumio.
The bilateral talks between the two heads of government covered trade and investment, the blue economy, human capital development and the impacts of global climate change.
“We are not only affected by actual and potential threats to our environment but also in regard to our livelihoods and very existence. I called on Japan and the G7 (Group of Seven: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) to lend robust support to initiatives aimed at addressing climate change, which includes the African Climate Action Summit that will take place here in Nairobi between September 4 and 6,” said President Ruto.
“I emphasised the need to refocus effective global attention on forgotten conflicts in Africa. I revisited our agreement with the recent G7 ministerial statement, which noted the urgent need to reinforce peace and security in the Horn of Africa, meet serious humanitarian needs and build resilience in the region,” he added.
