Value-added Tax in the Pharmaceutical Industry: What does it really mean for Kenya's Industralisation/

"A key issue for many countries is how to manage trade taxation policy in such a way that necessary public revenue can be acquired but not at the cost of long term industrialisation. An important area here is that of VAT and how best to levy it with respect to the pharmaceutical industry. Local manufacturing of pharmaceutical products in Kenya is focused on generic medicines on the Kenya Essential Medicines List 2010. This orientation of the industry offers the possibility of improving affordability, availability and quality of essential medicines. As such, the local industry has an important role. The 2014 Amendment Act aims to protect low income citizens from rising prices of basic essential medicines. However, there still remains ambiguity regarding implications of the indirect tax regime on local manufacturing. This short paper argues that there are still a number of unresolved issues which merit further attention."