<p>Tax treaties are meant to serve the core function of encouraging cross-border trade by the elimination of double taxation likely to be caused by such trade. Since taxation is a significant expense for companies, it would be prudent for countries, which want to promote cross-border trade, to enter into double tax treaties that will ensure countries share the tax on that income rather than taxing the same income twice by both countries. Bilateral tax treaties are, therefore, vastly common the world over. Kenya presently has about 14 double tax treaties, currently in force, and more than 30 other treaties in various stages of negotiation or conclusion. </p>
<p>The National Treasury briefly requested for comments and views from the public on the two draft tax treaties prior to tabling the same before parliament. The parliamentary approval process will, to a certain extent, give a level of public participation due to representation of the people by the members of parliament. It is yet to be seen to what extent the views received from the public participation exercise will be taken on board, and whether they influenced changes in the content of the two draft treaties. Where the public or parliament feels strongly that certain positions must be amended in the draft treaties, the representatives from either country mandated to negotiate the treaties must again sit down and discuss the proposed changes, agree to them and have their competent authority sign against the amended draft.</p>
<p><a href="https://taxjusticeafrica.net/wp-content/uploads/2022/05/The-Good-the-Ba… Good, the Bad and the Ugly- An Examination of Kenya’s DTAs with Turkey and Portugal</a> report reviews both treaties from the angle of Kenya as the jurisdiction where foreign companies intend to invest (also known as the ‘capital importing’ jurisdiction) and where there is likely to be a large untapped market (‘market jurisdiction’ or ‘source country’). It has been split into three main parts dubbed, ‘the good, the bad and the ugly’.</p>
