Pressure mounts on Treasury to bring back capital gains tax

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Business Daily: - Company Industry |Pressure mounts on Treasury to bring back capital gains tax.

No not in the UK - we already have one, albeit charged at the wrong rates and far too rarely on corporate gains - this is in Kenya:

The recent sale of multi-billion shilling Kenyan businesses without any revenues accruing to the government has sparked pressure for the reintroduction of capital gains tax – 25 years after it was suspended.

The tax – usually charged on profits from the sale of assets held for at least 12 months – was suspended in 1985 as part of measures to make Kenya more attractive to foreign direct investment, but tax experts now argue that it should be reintroduced to put the country in line with global trends.

Kenya also eliminated foreign exchange controls and allowed profit repatriation as part of the measures to make the economy more attractive to foreign capital but the conclusion of multi-billion shilling deals that left the government without a penny in revenues has raised eyebrows among ordinary Kenyans and raised a furore in high public offices.

“We are losing a lot of revenue by simply not taxing wealth made from capital gains leaving the working class to carry the country’s financial burden,” said Martin Kisuu, a tax expert and partner at audit firm PFK.

Mr Kisuu reckons that the suspension of capital gains tax to encourage investment has outlived its purpose and needs to be reintroduced to enhance equity in tax payment.

“We need to tax wealth such as capital gain to broaden the revenue base and nurture an equitable tax regime,” said Mr Kisuu.

And the article then goes on to recount losses amounting to hundreds of millions of dollars.

Good for PFK in that case for asking for change. Although I do wonder if they really meant PKF. Either way, if this is the profession doing the right thing in Africa it makes a very pleasant change to note that fact.

Perhaps the profession should take careful note of its duty in the UK to argue for a fair sharing of tax burdens and the removal of inappropriate reliefs.

But I can't see it happening. Not yet.