All verified tax refund claims will be payable within six months.
President William Ruto said if a refund is not made by the Kenya Revenue Authority (KRA) within this period, then it will be offset against future tax liability.
He said the counterbalance will be done without further application to KRA.
“Tax refunds remains a thorn in the flesh of many businesses. We are making a drastic policy shift on this issue,” he said.
President Ruto was speaking on Thursday in Nairobi while addressing the American Chamber of Commerce Regional Business Summit.
The meeting, he said, reinforces “our relationship that stands firmly on the sound foundation of shared values, including commitment to liberty, democracy and free enterprise”.
He noted that it is the commitment of the Government to have a tax regime that will spur commerce.
The President further announced the removal of the Value Added Tax on exported services in the Finance Bill in June.
“This tax not only renders us uncompetitive, but it also inhibits investors seeking to make Kenya their regional hub.“
He said he was keen on finalising new tax policy guidelines that will enhance transparency in the country’s tax regime.
President Ruto added that Kenya has deliberately undertaken to review the Digital Services Tax regime and align it with the Organisation for Economic Cooperation and Development’s inclusive framework.
The framework, he went on, will guide the taxation of digital commerce transactions.
“This is part of our plan to make Kenya one of the most attractive places in the world to do business,” he argued.
To attract fresh ideas in Kenya, the President noted that the Government will exempt start-up firms from paying taxes on unrealised gains on employee-allocated shares starting in July.
Meanwhile, Dr Ruto told the Summit that a deal between Kenya and Moderna to build a Sh65 Billion mRNA vaccine facility in Nairobi had been finalised.
“This is major; it will be the only such establishment in Africa.”