Welcome to the Business Today Live Blog of the Budget 2019/20.
Here are some of the highlights from the Budget reading on June 13, 2019 by Treasury Cabinet Secretary Henry Rotich on the Parliament floor.
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Tax measures
-Rate of VAT withholding tax reduced from 6% to 2%
-Capital gains tax up from 5% to 12.5%
-Insurance third party rules to apply to passengers and pedestrians
-Excise duty on alcohol and tobacco products increased by 15%
[Read: New high for liquor and cigarettes in the new budget]
-Exempt from VAT on locally manufactured motherboards
-Exempt from VAT : services offered to plastic recycling plants ; lower corporation tax for 5 years to 15% for investors operating plastic recycling plants.
-Import duty on raw timber reduced from 10% to zero.
-Excise duty of electricity-powered motor vehicles reduced to 10%
-Excise duty on betting activities proposed at 10% on the amount staked.
[Read: MPs lament of 10% tax on betting]
-Grant exemptions in special circumstances for requirement of KRA Pin to open bank accounts
-Reduce import declaration fee on goods and raw materials used by manufactures from 2% to 1.5% while increasing on finished goods from 3% to 3.5%.
-Increased railway devpt levy from 1.5% to 2%
-Impose export levy on hides and skins at 10%
Security Agengies Allocations:
Total: Sh326.5 billion
Defense-Sh121.6 billion
NIS-Sh37.7 billion
Prisons-Sh26.9 billion
State Dep Of Interior-Sh140 billion #BudgetKe2019— Kenya West© (@KinyanBoy) June 13, 2019
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Government Spending Priorities
Total Programs Spending = Ksh2.8 trillion
Big Four Agenda = Ksh450.9 billion
.@HKRotich: I have allocated Ksh 10.5 billion to cater for social housing and construction of affordable housing units, including housing Units for the Police and Kenya Prison. #BudgetKe2019 @KeTreasury @StateHouseKenya
— PDU Delivery (@PDUDelivery) June 13, 2019
- County allocation = Ksh371 billion
(subject to negotiation to the joint mediation committee established by the two houses of Parliament.)
Fiscal Debt : Ksh607.8 billion (5.6% of GDP)
-Revenue = Ksh2.1 trillion
-Expenditure = Ksh2.8 trillion
Will be financed by ;
-Net external financing = Ksh324 billion
-Net domestic financing = Ksh283 billion
Debt within sustainable levels, CS Rotich says.
- To reduce Govt deficit;
- Public sector wage bill contained by limiting strictly services of retiring staff, while restricting new recruitment to key staff. Cleansing of wage bill to root out ghost workers. Govt will also migrate from current payroll system.
- Travel cost cutting approaches such as electronic card system for all public officers travelling within or outside the country. Transport policy for using of fuel cards, with all govt vehicles to be procured from locally assembling plants.
- Uniform leases for Govt acquiring office space.
- Electronic end to end solution to all govt procurement processes.
- National pension policy to allow for a more sustainable pension scheme.
- For Micro-Small and Medium Enterprises (MSMEs) – Biashara Kenya Fund to give special priority to youth, women and persons living with disability
- Access to credit digitally by MSMEs with the setup of Ajira Digital Program ; objective to enable over one million youth annually to be engaged as digital freelancers. Youths pay Ksh10,000 over the next three years (effective 2020)… registration fee exempt from income tax.
- Ksh1 billion set aside for Ajira.
@HKRotich : The Government through the Ministry of ICT in Partnership with Academia, Civil Society and the Private Sector has set up a program known as “Ajira Digital Program” whose aim is to bridge the gap between skills available and skills demand #BudgetKe2019
— The National Treasury and Planning (@KeTreasury) June 13, 2019
- Lower VAT tax to eliminate need for KRA to make refunds — proposal to lower VAT witholding rate to be made.
- Pending bills – Ksh10.9 billion to be paid by the end of the month, eliminating most of the pending bills to youth, women and persons living with disability under the access to govt procurement opportunity.
- CS Rotich : Budget set to address challenges facing the economy
- Creating an enabling environment for businesses
- Need for prudent and efficient spending
- Need to mobilise domestic resources to fund priority projects and programs
- Need to reduce fiscal deficit
- Need to implement reforms to make the nation competitive
- Govt expects risks to economic growth occasioned by delay of long rains to be offset by performance in non-agricultural activities such as tourism and construction.
The theme for FY 2019/2020 is Creating Jobs, Transforming lives and Harnessing the "Big Four Plan" @HKRotich #BudgetKe2019 #BudgetKe2019 pic.twitter.com/UTyi5IYttz
— The National Treasury and Planning (@KeTreasury) June 13, 2019
- 3:39pm : CS Rotich arrives in Parliament
- 3:36pm : Treasury Cabinet Secretary Henry Rotich has stepped out of the National Treasury building holding the all important briefcase.
- Questions, questions — such as… will he drive, or will he walk to Parliament? He decides to get into Volkswagen Passat and drives to the August House.
- 3:10pm Here we go again!
Once more, the Budget reading is upon us.
Treasury Cabinet Secretary Henry Rotich is expected to step out of Treasury buildings anytime now and will walk to parliament where he will present the estimated Ksh3.02 trillion budget.
- With the country deep in debt of Ksh5.4 trillion, Kenyans are eager to see how Rotich will balance the country’s need to develop, debt burden and the taxation regime.
- It is also Budget Day in neighbouring countries Uganda, Tanzania and Rwanda.
East Africa Budget Day
Follow all happenings via #BudgetKE2019 #BudgetUG2019#BudgetTZ2019#BudgetRW2019
🇺🇬 🇰🇪 🇷🇼 🇹🇿 pic.twitter.com/Um64wJEmIF
— UGAMAN (@Ugaman01) June 13, 2019
- 3:23pm Earlier today, Cabinet held a special sitting to be briefed on the Budget and approved for CS Rotich to propose it before Parliament.
The Cabinet considered the Brief and approved the proposed Budget Estimates for submission to the National Assembly. pic.twitter.com/AWu450sZBl
— State House Kenya (@StateHouseKenya) June 13, 2019
As we wait for CS Rotich to step out and pose with that briefcase for the cameras, perhaps you can prepare yourself with these reads on the Budget 2019/20,
