The following is a summary of current incentives that have been put in place:
1. Investment Allowance
Investment allowance is provided as an incentive for investment in the manufacturing and hotel sectors at the rate of 100% countrywide. For Manufacturers Under Bond, the applicable rate is 100%. In addition, eligible capital expenditures have been expanded to include certain infrastructure and environmental protection equipment related to the manufacturing activity.
2. Export Promotion Programmes
a) Duty Remission Facility
Materials imported for use in manufacturing for export; the production of raw materials for export; or the production of duty free items for sale domestically, are eligible for duty remission. Applications for this facility should be made to the Tax remission for export office (TREO) at the Ministry of Finance.
b) Manufacture Under Bond
To encourage manufacturing in Kenya for export to the world market, the Government has established the Manufacture Under Bond programme that is open to both local and foreign investors. Enterprises operating under the programme are offered the following incentives:
i) Exemption from duty and VAT on imported raw materials and other imported inputs; and, 100 per cent investment allowance on plant, machinery, equipment and buildings.
ii) Bonded manufacturing enterprises can be licensed to operate within a 30 km radius of a Customs Office. This programme is facilitated by the Investment Promotion Centre and administered by the Kenya Investment Authority.
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