Kenya has expanded and simplified tax incentives it offers for investment in special economic zones (SEZs) in a bid to attract investment into those zones, the Industrialisation ministry said.

The ministry said in a notice the new regulations would “provide clarity on the operations of various actors, including to guide the movement of people, goods, and services within the special economic zones.”

This is in part a response to concerns raised that Kenya is falling behind other countries in the region like Ethiopia and Rwanda in winning investment from companies moving supply chains out of China to escape higher tariffs amid the US-China trade war, despite it being East Africa’s largest economy.

The draft regulations are set to simplify rules on its existing tax holiday incentives for investors looking to build facilities in special zones, the ministry said.

They propose the government to grant investors a tax break based on the size of the investment.