Solar, wind energy win big in Rotich budget as oil explorers get more taxes

June 13, 2014 by  
Filed under Green Energy News

Solar, wind energy win big in Rotich budget as oil explorers get more taxes

Updated Friday, June 13th 2014 at 00:00 GMT +3
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NAIROBI, KENYA: The National Treasury has proposed changes in the tax paid by exploration and production companies in the extraction sectors. This is aimed at increasing revenue stream for from the oil, gas and mining industries.

This means that companies whose interest in the country has surged in the unexplored extractive sector, will pay income tax as opposed to withholding tax on agreements they get into in the processing of exploring for oil and minerals.

National Treasury Cabinet Secretary Henry Rotich told Parliament yesterday that the planned replacement of withholding with income tax would make tax administration easy, as well as attractive to global players in the extractive industries.

“There is heightened interest in the oil, gas and mineral exploration in our country. To safeguard the fiscal challenges often associated with discovery of such natural resources, the Government has initiated various institutional and legal reforms for the extractive industry sector,” said Rotich when he presented his Budget Statement to parliament yesterday.

“To streamline industry’s tax regime, I have proposed to replace the current withholding tax with income tax on assignment of rights, (farmouts) based on net gain in line with international practice. This will address the inherent challenges and promote mining, gas as well as oil exploration and extraction operations.”  It could also be a way to increase the country’s earnings from oil, gas and mining sectors.

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