{{Kenya sought to assuage concerns over a planned review of capital gains tax, saying it was too early to say what asset classes will be targeted in a measure aimed at compelling the rich to fund development.}}
Finance Minister Henry Rotich told lawmakers in his budget speech last week there would be a review of the tax, suspended in the 1980s, to allow the wealthy to make a token contribution to the development of the country.
Since the budget there has been speculation that the capital gains tax will affect property and gains on equity investments, but the finance ministry said plans were at an embryonic stage.
“We have not even worked out how (the tax) will be implemented, the rates or even which areas will be taxed,” Geoffrey Mwau, economic secretary at the Treasury, told reporters on Wednesday, promising consultation on any measures.
Shares had dropped to a 14-week low on Tuesday as investors fretted the tax plans might sap the appeal of equities.
The shilling currency came under pressure and is still at a 13-week low of 85.65/85 against the dollar, also reflecting concerns of possible damage to the economy.
One local investor said the government had to find a balance between raising funds for development projects and supporting economic growth through private investments.
{Agencies}
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