BRUSSELS, Belgium, Oct 28 – The Government will review legal frameworks on taxation of diaspora remittances, Deputy President Rigathi Gachagua has said.
This is after multiple complaints from Kenyans working abroad over double taxation when sending money back home.
Addressing Kenyans living in Germany on Friday in Munich City, Mr Gachagua said the National Treasury together with the Kenya Revenue Authority (KRA), and the State Department for Diaspora Affairs are carrying out a comprehensive review of the relevant tax laws to address the matter.
“The issue of double taxation is a thorn in the flesh of Kenyans living in Diaspora. It was raised in Brussels, Rome, Colombia, Angola and South Africa. The government is addressing that matter. For us to get support from Diaspora in remittances we must sort out the issue of double taxation. I want to assure you that various laws are being looked into and a comprehensive review is being undertaken with a view of getting a legislation where you do not get double jeopardy by being taxed in Germany and Kenya,” said the Deputy President.
He said that in Belgium, the Government is at an advanced stage in discussions on reaching a favourable solution, led by The National Treasury, adding that nothing stops Kenya from opening discussions and replicating the same with Germany and other countries.
Latest data from the Central Bank of Kenya (CBK) shows that diaspora remittances in September 2023 stood at $340,444.18.
Remittances, which are the single-biggest source of forex inflows into Kenya, stood at $4.3 billion last year, beating earnings from tourism ($1.85 billion), tea ($1.13 billion) and horticulture that brought in $1.1 billion last year.
“With over 13,000 Kenyans living and working in various sectors in Germany, you are also taking part in the economic growth of this country. It is out of such work that we also benefit in foreign remittances, which have now overtaken tourism, tea, and even horticultural export earnings. Today, Germany is our second largest development partner. We are determined to break the ceiling for more remittances,” said the Deputy President.
The diaspora remittances are an important contributor to the country’s growth and development.
Mr Gachagua also intensified his efforts to market Kenya by highlighting investment opportunities, in a bid to promote the economy and increase national revenues.
To entice and encourage investments back home, the Deputy President said the government was addressing the challenges Kenyan Diaspora go through in investing in the country, especially in acquisition of property.
“Under the Affordable Housing Project, you now have a transparent way of purchasing a home of your choice.
Through the Boma Yangu website, register and start making payments. This project is being implemented across the country,” stated the DP as he asked the citizens to invest in the government-owned housing project.
He added that the Kenya and German governments were in discussions on securing more than 200,000 jobs for Kenyans, especially on technical skills.
“Germany is very keen on supporting Kenya in Technical and Vocational Education Training (TVETs). We see this as an opening to not only discuss opportunities, but also negotiate for better host and employment terms. This is alongside recognition of the academic credentials, especially from TVETs,” said the Deputy President.
The Deputy President was accompanied by his Spouse Pastor Dorcas, Rigathi, Kenya’s ambassador in Germany Tom Amolo, Deputy Head of Mission Valerie Rugene and the leadership of the Diaspora in Germany, among others.
In his remarks, the Deputy President also told the diaspora community that the Government has moved hundreds of services to the e-Government so as to ease and boost service delivery to Kenyans living abroad.
He explained that the aim was to ensure all services are available on the digital platform, to ensure that travelling to Nairobi by those living abroad was not processing documents like renewal of passports.
“We have already invested in Mobile Consular Services here in Germany. It is a matter of time before we address all your concerns on registration and related services. Your work is to make more money, not chasing registration documents, which can be processed online,” he said.
His official visit to Germany was also to market Kenya’s agro-produce, particularly coffee.
He stated that with the recent reorganisation of the Government, especially on appointment of ambassadors, the Ruto Administration wants to expand Kenya’s stake in the German coffee market.
“This is an assignment that the staff, led by the Head of Mission must fulfil. President William Ruto’s Administration lays emphasis on Economic Diplomacy. As employees of the people of Kenya, you must promote and protect the interests of your bosses back home. There is absolutely not reason the Diaspora community must beat us in bringing more money than millions of farmers back home,” he said.
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