Aug 10, 2022

Mawazo Writing Africa

Writing about the main

Kenya to woo vaccine firms with tax offer

Kenya has offered tax incentives to attract investors looking to build factories to manufacture human vaccines, including for Covid-19.

Investors with investments of at least Ksh 10 billion ($85 million) are exempt from corporate and income taxes at exclusive rates to be negotiated with the government.

This is in line with legislative changes brought about by the Finance Act of 2022 signed into law by President Uhuru Kenyatta last Friday.

Parliament amended the Income Tax Act through the Finance Act 2022 to provide tax incentives to companies that undertake local production of vaccines.

“A company doing business under a special framework agreement established with the government to set up the human vaccines manufacturer, whose capital investment is at least Sh10 billion, are subject to the tax rate set out in the special operating framework agreement with the government,” states the Finance Law of 2022.

Kenya aims to establish a fully-fledged antigen mass production facility capable of producing various types of vaccines.

< p>Parliament also amended the law to exempt the taxation of assumed interest in relation to an interest-free loan to a company that produces human vaccines.

The tax exemption also extends to offsetting taxes , accruing to a company producing human vaccines.

Dividends paid by a company, obligation to produce human vaccines for non-residents, and income of a company wishing to produce human vaccines are not subject to income tax.

< p>In January, Kenya asked companies to submit bids for the construction of a Covid-19 vaccine factory in Kenya as part of a global tender BioVax Institute, a government trading and manufacturing company. The state has since selected American biotechnology company Moderna to establish a manufacturing facility in Kenya, its first in Africa, to produce messenger RNA (mRNA) vaccines.

President Kenyatta announced that Kenya has partnered has entered into with Moderna to set up this mRNA manufacturing facility to prepare the country and our sister nations on the continent through the African Union to respond to future health crises and stave off the next pandemic around $500 million (Ksh 56.5 billion) in to invest the Kenyan facility and ship up to 500 million doses of mRNA vaccines per year to the African continent.

It also has plans to start canning Covid vaccine in Africa already from 2023 by agreement with the Kenyan government.

– Business Daily