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Kenya reviewing royalties, fees and taxation for mining companies

Mining Cabinet Secretary Dan Kazungu says the move is aimed at making sure the country is getting the best royalties and fees and not being taken advantage of by mining firms/FILE

NAIROBI, Kenya, Jan 15 – Kenya is reviewing its fiscal regime in the mining sector that entails the review of royalties, fees and taxation.

Mining Cabinet Secretary Dan Kazungu says the move is aimed at making sure the country is getting the best royalties and fees and not being taken advantage of by mining firms.

He says the current fiscal regime is outdated since it was put in place in the colonial times and needs to be relooked at.

“We are still using a fiscal regime that was set up in the 1960s and informed by the thinking of the colonial government, times have changed, and the environment has changed,” he said.

He was speaking on Monday while receiving a report on an integrated Mining Fiscal Regime, by the Extractives Hub together with Adam Smith International.

This follows a study and review of Kenya’s fiscal and Extractives legislative frameworks. The report shares recommendations on the possible structure implementations.

The study placed Kenya’s mining sector among other peer projects in three commodities of current interest in the country in the Gold, Coal and Titanium.

“This review will help us now start the conversation of the review of the legislative framework with stakeholders which will see a full framework worked upon as soon as possible,” he said.

According to the study, Kenya’s fiscal regime falls broadly within norms observed in peer countries with regard to revenue flows and government take.

Kenya’s current royalty payout stands at 70 percent to the National government, 20 percent to county governments and 10 percent to the communities.

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Kazungu also announced that all is set for the much awaited airborne survey of minerals in Kenya, with the survey expected to be done in March 2018.

He says the country met all the preconditions set by the EXIM Bank for the loan.

China’s Geological Exploration Institute will do the survey which will be inspected by UK based International GeoScience and PWG from Canada.

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