Government rules out new tax incentives for PPP projects

The move is aimed at reducing government tax expenditure and ensuring value for money as the government seeks to attract more private capital into infrastructure development.

Ahead of the 16th Africa Public-Private Partnership Symposium in Nairobi, Treasury said the current tax framework provides sufficient incentives for investors, with any future concessions subject to stricter scrutiny.

National Treasury Principal Secretary Dr Chris Kiptoo said the government was reviewing tax breaks across various sectors, citing limited returns compared to the revenue forgone.

“We are in a tight fiscal space. We are already looking at the tax expenditures we have incurred in many sectors for which we don’t seem to be getting commensurate benefits for our people. That’s why we are beginning to say we need to lower tax expenditure; it means any of the benefits given before are now being reconsidered again,” Kiptoo said.

Treasury maintained that investors would continue to enjoy existing concessions provided for under the law, while the government focuses on creating a stable environment for private investment.

The symposium is expected to explore ways of mobilising private capital to finance development projects, with the government acknowledging that the current allocation of 30 per cent of the national budget to development spending is insufficient.

Principal Secretary for Public Investment and Asset Management Cyrell Odede said the government needed to turn to PPPs to bridge the funding gap and accelerate infrastructure development.

“We are remaining with 30 per cent of finance for our projects, which is not enough. That’s why, as a country, we need to revert to PPP, and that’s why you are seeing projects,” Odede said.