President William Ruto: I’ll uphold rule of law

william ruto, meg whitman

President William Ruto, US Ambassador to Kenya Meg Whitman and American Chamber of Commerce (Amcham) board president Brenda Mbathi during the organisation's regional business summit in Nairobi on March 30, 2023.

Photo credit: Rebecca Nduku | PCS

President William Ruto has committed to respect the constitution and uphold the rule of law even as opposition leader Raila Odinga persists with anti-government protests.

The President on Thursday also said he has promised US President Joe Biden among other world leaders, that his government will respect the independence of institutions.

“Just yesterday (Wednesday), we had a virtual meeting with US President Joe Biden and other world leaders at the democracy summit where I underscored our commitment to constitutionalism and the rule of law and respect for institutions,” President Ruto said during a government summit with the US Chamber of Commerce in Nairobi.

At the same time, President Ruto made key tax concessions, backsliding from a hard-line position the previous regime held in regards to taxation of multinationals operating within the digital space in the country.

While announcing several tax reforms, including the launch of a new tax policy effective June, President Ruto said Kenya will stop imposing the Digital Service Tax (DST) on the multinationals directly.

He said the country would instead abide by the guidelines of the Organisation for Economic Cooperation and Development (OECD), whose effect is that Kenya will collect less taxes from companies such as Amazon, Meta, Microsoft andGoogle and others that operate in Kenya but are based in the US.

“Following discussions with players in this sector, we have made a commitment to review this tax regime and align it with the two-pillar solution currently being developed by the OECD, which is an inclusive framework,” the President said. “We have made this policy shift because we consulted, we listened and we want to create a win-win partnership.”

President Ruto also announced that after much wait for an operational tax policy that would assure businesses of stability and predictability of taxation, his government was finalizing one.

“This (tax) policy that will enhance transparency in our tax regime will take effect by June 2023 and it will be in place for a minimum of three years,” he said.

The President also announced that starting July, VAT on exported services would be eliminated.

“This tax not only renders us uncompetitive as a country, but it also inhibits investors seeking to make Kenya their regional global services hub,” the President said.

He also directed that going forward, businesses will be allowed to offset any unsettled tax refunds that go beyond six months from their tax liabilities.