Deputy President Rigathi Gachagua has said the government will review legal frameworks on taxation of Diaspora remittances.
This is after multiple complaints from Kenyans working abroad over double taxation when sending money back home.
Addressing Kenyans living in Germany, Gachagua who is on a state visit to the country said the Treasury together with the Kenya Revenue Authority (KRA), and the State Department for Diaspora Affairs are carrying out a comprehensive review of the relevant tax laws to address the matter.
"The issue of double taxation is a thorn in the flesh of Kenyans living in the Diaspora. The government is addressing that matter. For us to get support from Diaspora in remittances we must sort out the issue of double taxation,” he said.
Gachagia assured the Kenyans that various laws are being looked into and a comprehensive review is being undertaken to get legislation to avoid such double taxation.
He noted that in Belgium, the government is at an advanced stage in discussions on reaching a favourable solution.
Latest data from the Central Bank of Kenya (CBK) shows that diaspora remittances in September 2023 stood at $340,444, 18. (Sh51.2 million).
Remittances, which are the single-biggest source of forex inflows into Kenya, stood at $4.3 billion (Sh602 billion) last year, beating earnings from tourism $1.85 billion (Sh259 billion), tea $1.13 billion (Sh158.2 billion) and horticulture that brought in $1.1 billion (Sh154 billion) last year.
"With over 13,000 Kenyans living and working in various sectors in Germany, you are also taking part in the economic growth of this country. It is out of such work that we also benefit from foreign remittances, which have now overtaken tourism, tea, and even horticultural export earnings. Germany is our second-largest development partner. We are determined to break the ceiling for more remittances," said the Deputy President.
The diaspora remittances are an important contributor to the country’s growth and development.
Gachagua also intensified his efforts to market Kenya by highlighting investment opportunities, in a bid to promote the economy and increase national revenues.
To entice and encourage investments back home, the Deputy President said the government was addressing the challenges the Kenyan Diaspora go through in investing in the country, especially in the acquisition of property.
"Under the Affordable Housing Project, you now have a transparent way of purchasing a home of your choice.
Through the Boma Yangu website, register and start making payments. This project is being implemented across the country," stated the DP as he asked the citizens to invest in the government-owned housing project.
He stated that with the recent reorganisation of the Government, especially on the appointment of ambassadors, the Ruto Administration wants to expand Kenya's stake in the German coffee market.
"This is an assignment that the staff, led by the Head of Mission must fulfil. President William Ruto's Administration emphasizes Economic Diplomacy. As employees of the people of Kenya, you must promote and protect the interests of your bosses back home. There is not reason the Diaspora community must beat us in bringing more money than millions of farmers back home," he said.