Katiba Institute Kicks Up A Storm Over Double Taxation Agreements

id : 107 Tax Policy   
posted by : Tnews
 DOQ : 2020-10-13 14:46:47

This claim is contained in a court case questioning the government’s double taxation agreements sanctioned by the Treasury.

“The claim that for the double taxation agreements (DTAs) instead of having a fair agreement, it is skewed towards the capital-rich.


Skewed Mauritius DTA

One of the agreements is a deal with Mauritius, a country with lower tax rates compared to Kenya.


In the deal, Kenya agreed that profits collected from operating aircraft shall be taxable in the country that the companies are registered. In event the partner country decides to charge tax, it cannot exceed 50 per cent of its tax bracket.

Local tax rate higher than DTA rates

All the 10 DTAs signed appear to be similar and they limit withholding tax to 10 per cent. “Whereas the Kenyan domestic rate is 20 per cent.

Exempt Income

It is claimed that companies established in the partner states and which have a ‘permanent establishment’ in that country for six months are exempt from paying taxes on their profits.

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