Chinese Investors Seek Double Taxation Deal In East Africa

Chinese Investors Seek Double Taxation Deal In East Africa

From Business Daily

Chinese investors in Kenya have asked the East African Community to implement a double taxation agreement (DTA), saying the current regime has hurt their expansion plans.

The investors with interests in construction, trade, service industry, manufacturing and real estate sectors said they currently face a heavy burden paying the same kind of taxes to all the EAC states.

The EAC has been slow in the signing and ratification of single taxation regime despite the promise made by its five heads of state to end the double taxation.

Under DTA regime, a firm which has been taxed for the income generated in the country where the business is incorporated cannot face similar levies in other states in the region where it has branches.

“The double taxation is an issue. Of course we know what they are asking for will not happen overnight, but the push is necessary,” said Vera Zhan, the head of China Desk East Africa at Standard Chartered Bank.

The bank has in the last one year being holding forums with Chinese investors in Kenya to capture on the growing business interest from the East.

The China Desk Commercial unit at Standard Chartered Bank currently holds 150 accounts for Chinese businesses operating in Kenya.

Kenya and Rwanda are the two countries in EAC that have signed DTA so far.

“We don’t know when this will happen, but we know it’s being worked on in the ministry level,” said Philip Korir, from PricewaterhouseCoopers during a Chinese business forum event in Nairobi hosted by Standard Chartered Bank.

Read more at Business Daily