Wayne Lumbasi
Kenya has granted an exemption to major United States multinational companies from its newly introduced 15% minimum corporate tax, allowing firms such as Google, Meta, and Amazon to continue paying tax solely under U.S. rules.
The exemption follows recent adjustments to the global minimum tax framework agreed under the Organisation for Economic Co-operation and Development and the G20, after negotiations led by the United States. While Kenya had incorporated the 15% minimum tax into its domestic law to align with international standards, the revised global arrangement permits U.S.-based multinational companies to remain subject only to their home country’s tax system.
The 15% minimum corporate tax was introduced to ensure large multinational enterprises pay a baseline level of tax on profits generated within Kenya. The measure was expected to strengthen domestic revenue collection and support funding for public services, including healthcare, education, and infrastructure. With the exemption now in effect, Kenya is expected to collect less revenue than initially projected from some of the world’s largest corporations operating in the country.
The government says the decision reflects Kenya’s commitment to maintaining stable trade and investment relations with the United States, one of its most important economic partners. It says aligning with the updated global framework under the Organisation for Economic Co-operation and Development helps avoid potential trade disputes and supports continued investor confidence.
The development also highlights broader challenges faced by developing economies within global tax negotiations, where policy shifts driven by major economies can reshape domestic revenue strategies. While non-U.S. multinational firms operating in Kenya will remain subject to the 15% minimum tax, U.S. companies will continue to be governed exclusively by American tax provisions.
As Kenya adjusts to the new arrangement, policymakers are expected to explore additional measures to strengthen revenue collection while remaining aligned with international tax commitments. The move showcases the delicate balance between protecting national fiscal interests and navigating complex global economic relationships.
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