Kenya implements tax policy reforms to boost medical production prospects
The Kenyan government has introduced some changes to its tax and social contributions regime in the country’s Finance Act 2023 which was implemented in September 2023.
Withholding tax on royalties and interest paid to foreign persons by a company undertaking the manufacture of human vaccines in Kenya have been waived as part of efforts to attract foreign direct investment (FDI) to the pharmaceutical sector.
This falls in line with President William Ruto’s plans to make Kenya a drug-making hub within Africa.
The provisions in the Act will facilitate the work of foreign drug-making companies in the country including the US-based Moderna Inc. a biotechnology company that develops vaccines.
Moderna which has commenced processes to establish a Messenger RNA (MRNA) manufacturing facility in Kenya is expected to produce about 500 million doses of vaccines in Kenya every year, according to The Nation.
The mRNA is a molecule that contains instructions or recipes that directs the cells to make a protein using its natural machinery, a biotechnology that influenced the production of the Covid-19 vaccine.
Kenya has indicated its focus on the Special Economic Zone (SEZ) programme that enables economic growth under which Morderna will operate.
Kenya has been a major exporter of pharmaceuticals in the region, making approximately 92.9 billion shillings (US$569 million), 53.8% higher than 60.4 (US $370 million) billion shillings in 2016, according to official statistics, The Nation reported.
The majority of Kenya’s medicines are exported to Tanzania, followed by Uganda, Somalia, Rwanda, Ethiopia, and Zambia.
