Kenya's new mining tax discourages investment

Investors interested in exploration and mining will find Kenya less attractive as a result of a new mining tax, reports Daily Nation

In an effort to address its budget deficit, the government introduced a withholding tax on the gross proceeds from share or property transfers in the extractive sector.

PricewaterhouseCoopers called the new tax measure punitive since it doesn't take into account associated costs. A capital  gains tax would have allowed for a deduction of attributable costs.

While the government's 2012 finance bill initially proposed to re-introduce a capital gains tax for the transfer of shares or property, it was later replaced by a withholding tax.

In 1985, Kenya had suspended its capital gains tax to encourage savings and investment.

Image: Shutterstock / Emjay Smith