Kenya’s special economic zones to attract more FDIs

Published October 3, 2015

Kenya is set to stop new investments in its Export Processing Zones before the end of this year after years of official frustration that their operations have failed to add value to the economy despite numerous tax incentives.

Fanuel Kidenda, the chief executive of EPZA, however, noted that tax incentives are integral in ensuring the competitiveness of SEZ and EPZ investors on a global scale, adding that more important is the need to address systemic issues in the investment environment that have hindered the attraction, facilitation, and retention of investments in Kenya.

Enterprises at the SEZs will enjoy several tax incentives under a controlled environment to ensure that the Kenya government does not lose out on revenues. These include value-added tax exemption on all supplies of goods and services to enterprises, reduction in corporate tax to 10 percent from 30 percent for a period of 10 years of operation, and 15 percent for the next 10 years.

SEZs are currently undergoing a pilot programme in Mombasa, Lamu, and Kisumu.