Value Proposition

  • Inputs: Lower Cost of Doing Business

Lower operational cost and a lower base of recharging
costs from the SSC to subsidiaries, due to the VAT zero
rated status and the exemption from duty and other
levies.

Implications on the P&L:

  • 16% saving due to the VAT zero rating status
    on all supplies to SEZs
  • Approximately 43.5% saving on the
    importation of goods due to the customs duty
    and Import Declaration Levy exemption.
  • Up to 36% saving on imported services due
    to the reverse VAT and Withholding tax exemption

Implications on Cashflow:

Enhanced cash flows due to the VAT zero rated
status on the supply of goods to the SEZ. This VAT
would otherwise be recovered through the VAT
refund process, which is administratively
cumbersome.

  • Lower cost of international payments

Lower cost of payments to international (nonresident)
service providers, financiers, shareholders, due to the 10-
year withholding tax exemption and a preferential rate
of 5% thereafter on Interest, Management fees, and
royalty payments. The SSC can be used to pool funds
from foreign financiers, for onward lending to Subsidiaries

Implications on the P&L:

  • 20% saving on payment of royalties to nonresidents.
  • 20% saving on payment of management
    fees/professional fees to non-residents
  • 15% saving on payment of interest to nonresidents
  • 15% saving on payment of dividends to both
    resident and non-resident shareholders

  • Competitive pricing of services – both local
    & Exported

Competitive pricing of services to both local and
foreign subsidiaries due to the VAT exemption on
services to local subsidiaries and VAT zero rate on
services to foreign subsidiaries

Implications on the P&L:

  • 16% saving on services provided to
    Kenyan subsidiaries.

Implications on Cashflow:

Reduced VAT cash outflow due to the VAT exemption
on services provided to the local subsidiaries

  • Corporation Tax on Business Profits

Reduced corporation tax outflows due to the
preferential Corporation tax rate of 10% for the
first 10 years, 15% next 10 years, and 30%
thereafter.

Implications on the P&L:

  • Up to 67% saving on corporation tax
    cash outflows.

  • Capital Raising: Lower Finance Costs

1. Debt

Lower cost of foreign debt due to the 10-year
withholding tax exemption and a preferential rate of
5% thereafter.

Implications on the P&L:

  • 16% saving on services provided to
    Kenyan subsidiaries.

2. Equity

Maximum distribution to shareholders due to the
withholding tax exemption on dividend payments.

Implications on Distribution of Returns:

  • Up to 15% tax saving on the payment
    of dividends to both resident and nonresident
    shareholders.
  • Streamlined Support with
    Regulatory Authorities

Accelerated administration process with the relevant
authorities, including the seamless flow of human capital
due to the accelerated processing of expatriate work
permits/visas by the SEZ One-Stop Centre.
TRIFIC’s SEZ One-Stop-Shop assists our clients with their
registration and licensing process and other services such as
processing work permits, etc., and provides regulatory
support throughout the entity’s life in TRIFIC.
The TRIFIC One-Stop-Shop ensures that its enterprises realize
all incentives available and only focus their attention on
their core business.

  • Lower Tax Compliance Risk

Lower tax compliance burden and risk due
to VAT exemption, which eliminates VAT
obligations and risk.