5 March 2015
The government has tabled the Special Economic Zones Bill 2015 which seeks to provide the legal framework to govern the three manufacturing and service hubs that will produce exclusively for the export market.
The bill that was tabled by majority leader Adan Duale proposes among others that all licensed special economic zones enterprises, developers and operators be exempted from all taxes.
The three Special Economic Zones are expected to drive Kenya’s industrialization.
In an effort to boost exports, the government six years ago announced plans to build three special economic zones to be located in Kisumu, Mombasa and Lamu in the next five years.
The three manufacturing and service hubs are expected to produce exclusively for the export market.
3,400 square km of land had been set aside for the zones whose development has fallen behind schedule due to lack of legislation.
The Economic Zones bill proposes among others that all licensed special economic zones enterprises, developers and operators be exempted from all existing taxes and duties to encourage investments in the ventures.
In addition, the state would be required to provide work permits for up to a fifth of those who work on full-time basis in the Special Economic Zones.
The bill adds: “On recommendation of the Special Economic Zones Authority, additional work permits may be obtained for specialized sectors.”
The special economic zones are expected to facilitate importation of raw materials for processing into exports.
This includes an agro-processing zone for blending and packaging of fertilizers, teas and coffees as well as a meat processing facility to encourage offshore fishing.
In addition, agricultural, industrial, science and technology parks will also be built in the zones.
Those to invest in the special economic zones will enjoy protection of their industrial and intellectual property rights.
The bill lifts forex limits for those involved in the zones stating: “A licensed special economic zone enterprise shall enjoy the right to fully repatriate all capital and profits, without any foreign exchange impediments.”
The bill has proposed hefty penalties for those who misuse privileges accorded to those special economic zones setting a fine of 20 million shillings or a jail term of three years or both as well as have the goods forfeited.
Courtesy of KBC
5 March 2015