Faith Masita
Kenyan lawmakers are scrutinizing proposed changes to the Special Economic Zones (SEZ) law that could extend lucrative tax incentives to oil and gas firms, even as concerns mount over potential revenue losses.
The National Assembly’s Departmental Committee on Trade, Industry and Cooperatives is reviewing the Special Economic Zones (Amendment) Bill, which seeks to open up upstream and midstream petroleum activities to SEZ benefits—traditionally reserved for export-oriented industries.
Energy firm threw its weight behind the proposals, arguing they would lower entry barriers for local investors in a sector long dominated by multinational corporations. The company said the changes would “enhance investor confidence” and make it easier to finance large-scale petroleum projects that typically run between 10 and 25 years.
Gulf Energy told the committee the incentives would reduce compliance costs, improve access to capital, and enable small and medium enterprises to participate in joint ventures. The firm added that the move could spur technology transfer, create jobs, and unlock growth in downstream industries such as petrochemicals, fertilisers, plastics, refining, and LPG production.
But some lawmakers pushed back, warning the incentives could erode the tax base. Narok West MP cautioned that oil and gas firms already benefit from existing tax breaks, raising the risk of “double incentives” if the bill passes in its current form.
Parashina pointed to planned exploration activities in South Lokichar, questioning whether the proposed changes would ultimately reduce government revenues from the sector.
Other stakeholders appearing before the committee included , , and , alongside industry lobby groups.
The committee is now set to review submissions before tabling its recommendations, a decision that could shape Kenya’s strategy for attracting investment into its emerging oil and gas industry while balancing fiscal risks.
