BBI proposes to exempt youth business owners from paying taxes for seven years

A hawker going about his business in Nairobi. The BBI report has proposed to exempt young business owners from paying taxes for 7 years PHOTO: COURTESY.

The much-awaited Building Bridges initiative report has proposed a seven-year tax holiday for young people running startups.

This means that small and medium enterprises being run by young people will be exempted from paying taxes for the first seven years they are operational.

The report which was launched on Wednesday by President Uhuru Kenyatta noted that the business environment in Kenya was discouraging the entrepreneurial spirit.

The report also noted that the current trend in the Kenyan economy cannot fulfill the much-needed employment opportunities hence bringing the need to encourage self-employment.

“Develop and launch national ease of doing a business index for small Kenyan businesses rather than relying on foreign indexes that are designed for global comparisons.This should be a comparative annual assessment by KNBS that is segregated by geography -counties, cities, and towns and is publicized” the report says.

The report also proposes a  flat income rate for the different tax brackets for those earning taxable income.

This comes just months after the Kenya Revenue Authority began a massive revenue tax collection drive in an effort to meet its target of 1.8 trillion for the 2018/2019 financial year.

This is the first tax relief proposed for business owners since the tax collection drive was launched.