De La Rue exporters get nod to sell locally

 

Currency printing firm De la Rue has been given a year to enjoy tax-free status under an export licence while supplying products locally.

The British company was allowed to use its subsidiary registered under the Export Processing Zone that enjoys exemption from custom duties and value added taxes on all imports of raw material, capital equipment and other inputs that go into export-oriented business.

EPZ firms also get exemption from income taxes for 10 years from the date of first sale as an EPZ enterprise; a lower tax of 25 per cent applies for 10 years following end of tax holiday.

“I hereby grant De la Rue Kenya EPZ authority to sell up to 100 per cent of their annual production into the customs territory for a period of one year,” Industrialisation Cabinet Secretary Peter Munya wrote to EPZ acting Chief Executive George Makateto.

EPZ firms also enjoy exemption from payment of withholding tax on dividends and other payments made to non-resident investors for 10 years as well as exemption from stamp duty on the execution of any business transactions.

They also get access to the onsite customs clearance within the export processing zone, for incoming and outgoing materials.

De La Rue has two firms registered in Kenya, De La Rue Currency and Security Print Ltd (trading) and De La Rue Kenya EPZ Ltd (dormant).

De La Rue EPZ shareholding is held by Thomas De La Rue AG domiciled in Switzerland, which owns nine shares, and British De La Rue Holdings Plc with one share.

The second local affiliate, De La Rue Security Print Ltd, is owned by Kenneth Hamish/Wooler Keith, a Kenyan with one share, De La Rue Holdings with one share, and Thomas De La Rue AG with 49,999 shares.

The National Treasury has been making payments, being part of the five million pounds (about Sh666.8 million) it would take to acquire shareholding in the two firms.