This archive report was first published on 18 August 2019.
On August 18, 2019, the Treasury exempted the merged CBA and NIC bank from paying share transfer tax running into hundreds of millions of shillings.
The exemption was granted by suspended Treasury Secretary Henry Rotich, who had previously exempted the transfer of CBA shares into NIC Bank from paying stamp duty of one percent of the worth of the unquoted stocks being transferred.
As part of the share swap between the two banks, current NIC group shareholders own 47 percent of the merged entity, while CBA shareholders, including the Kenyatta family, own 53 percent of the merged entity.
Despite NIC Group remaining listed, the transfer of CBA unquoted shares makes them liable for the one percent stamp duty tax, which analysts estimate could be over Sh350 million.
According to a June 26 legal notice, Mr. Rotich directed that the instruments executed in respect of the transactions relating to the merger of NIC Group PLC and Commercial Bank of Africa shall be exempt from the provisions of the Act.
Stamp duty is a tax charged on several transactions, including the transfer of stock, land, and houses, and ranges from one percent to four percent of the property value.
