Way Forward By Ruth Wachira

Way Forward on Subcontractor Issues Withholding Tax Align the tax rates as appropriate, ensuring that the applicable rates are clearly defined. Currently there is an interpretational issue between section 15 and 16 of the 9th schedule. Obtain Tax Credits from the country of Resident If the above do not resolve the issue, agitate for a Double Tax Agreement between the two countries.

Way Forward on Subcontractor Issues Value Added Tax-this happens because most of such goods have alternative use in the local market and are not exclusively usable by the Extractive Industries Get a Pre approved lists of goods or services and specific quantities to be delivered by the contractor approved subcontractors for pre- approval by The National Treasury.

Way Forward in Efficiency in Tax Matters Clear allocation of Responsibilities between the various Government Agencies/ Department and the National Oil Company Identification of synergies and full optimization of the synergies to avoid duplication of Tasks Information and data sharing Simple Self Assessment Systems Joint audits for costs and transfer pricing

Way Forward on Transparency Have clear Policy and Legal Framework As much as is practicable, basis of Taxation should be clear and not subject to interpretation Production and Exploration agreements should try and avoid differing incentives from one contractor to another. This can be avoided by having model agreements with standard give aways for all contractors.