Kenya’s Capital Markets Authority Chief says new Business Law will spur Growth

CMA chief, Paul Muthaura.

Kenya’s capital market regulator, Capital Markets Authority (CMA), is optimistic that a business regulation recently signed into law will spur growth at the capital markets industry. It says the Finance Act has provisions that will foster growth in the capital markets by creating a friendly and convenient trading environment.

CMA Acting Chief Executive, Paul Muthaura, said the Act has amended the Income Tax Act to remove provisions on the taxation of any gain on the transfer of securities traded on any securities exchange licensed by the Capital Markets Authority and presents a huge opportunity for growth.

“For Kenya to become an investment destination of choice as envisaged in the Master Plan, we need to create an environment that not only supports domestic savings and investment but also attracts international capital in our increasingly competitive global marketplace,’’ Mr Muthaura said.

Mr Muthaura further stated that the exemption of listed securities’ transactions from payment of CGT will allow the capital markets to develop even more and encourage the flow of both domestic and foreign capital into the Kenyan economy.

According to Daily Nation, the Finance Act also amended the Income Tax Act to allow a company introducing shares through listing by introduction on any securities exchange to pay corporate tax at the rate of 25 per cent for a period of five years, commencing immediately after the year of income following the date of such listing.

CMA expects the provision to encourage additional listings by companies at the Nairobi Securities Exchange. These companies will then enjoy the benefits of raising additional capital in future while also affording investors an opportunity to diversify their investment opportunities.

Also, the real estate sector is expected to grow after the Finance Act amended the Stamp Duty Act by removing duty on transfer of real estate into a Real Estate Investment Trust before December, 2023.

Kenya’s National Treasury Cabinet Secretary, Henry Rotich, also exempted documents executed in connection with an Asset-Backed Securities (ABS) approved by CMA from payment of stamp to enhance growth in the uptake of ABS.

President Uhuru Kenyatta recently signed six new business legislations meant to transform Kenya’s business landscape and thrust the country’s competiveness to greater heights when fully implemented.

The new legislations include the Companies Act, the Insolvency Act and the Special Economic Zones Act, the Business Registration Service, the Companies and Insolvency Legislation (Consequential Amendments) Act 2015 and Finance Act amendments 2015.

This article first appeared HERE


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