CMA seeks tax cuts for firms to pay win­nings in shares, T-bonds

Business Daily (Kenya) - - MONEY & MARKETS - James Ngun­jiri ngun­jirij@ke.na­tion­media.com

The Cap­i­tal Mar­kets Au­thor­ity (CMA) is seek­ing tax in­cen­tives for bet­ting firms that pay win­nings in form of listed shares.

In a raft of pol­icy pro­pos­als for 2018/19 fis­cal year, the watch­dog notes the bet­ting firms have be­come com­mon with hun­dreds of Kenyans win­ning huge amounts.

“The gov­ern­ment has iden­ti­fied the huge tax po­ten­tial and im­posed a tax of 35 per cent.

“Although there is no con­crete data to de­ter­mine the ap­pli­ca­tion of funds won through bet­ting, in­di­ca­tions are that most of the amounts won are spent on con­sump­tion,” said the mar­kets reg­u­la­tor.

The CMA said to en­cour­age sav­ings, there is a need to in­cen­tivise bet­ting firms that pay through buy­ing shares in blue-chip firms or Trea­sury bonds.

Di­rec­tor of pol­icy and strat­egy Luke Om­bara (pic­tured) said rather than com­pete with bet­ting in­dus­try, the reg­u­la­tor would be try­ing to lever­age on it to “in­cul­cate some sav­ing cul­ture”.

“We’ve ini­ti­ated dis­cus­sions with bet­ting com­pa­nies to be able to get data. We are look­ing at the fig­ures we are see­ing on daily ba­sis — Sh100,000... Sh1

“We’re look­ing at the ig­ures we are see­ing on daily ba­sis — Sh100,000... Sh1 mil­lion. This is a sub­stan­tial amount.” LUKE OM­BARA I CMA DI­REC­TOR OF POL­ICY

mil­lion. This is a sub­stan­tial amount, which could be mo­bilised into sav­ings,” he said.

This is the third year the CMA is hold­ing an­nual pol­icy pro­posal talks with var­i­ous stake­hold­ers.

The law re­quires it holds such fo­rums be­fore the end of De­cem­ber, with the reg­u­la­tor obliged to sub­mit pro­pos­als that will re­sult in the deep­en­ing of the cap­i­tal mar­kets in terms reg­u­la­tory frame­work and devel­op­ment as­pects to State.

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