Kenya – Gamblers among losers in treasury’s Kshs. 3.03T budget

The National Treasury Cabinet Secretary Ukur Yatani while presenting FY2021/2022 budget before Parliament acknowledged prevailing revenue collection challenges owing to the effects of COVID-19.

In the coming financial year which begins on 1st July 2021, the Kenya Revenue Authority (KRA) is expected to collect ordinary revenues amounting to Kshs. 1.78 trillion in order to fund the Kshs. 3.03 trillion budget.

National Treasury expects to generate additional Kshs. 8.7 billion through custom measures agreed by East Africa Community partners states and proposed amendments in the Finance Bill 2021.

“Further, I propose to provide VAT exemption to diagnostic and laboratory reagents, artificial respirators including therapeutic respiration apparatus, breathing appliances, gas masks as well as medical equipment and technologies used in the provision of medical services. It is my hope that the suppliers of these medicaments and medical equipment will reciprocate by making their prices affordable,” – said CS Yatani.

With new covid variant still lurking in the country, CS Yatani has eased pressure on manufacturers of pharmaceutical products who will now enjoy exemptions on inputs used in the making of medical ventilators and breathing appliances in order to boost access among patients with covid complications.

Mining and exploration firms will also enjoy VAT exemptions on VAT goods used exclusively in geothermal or oil exploration and mining prospects which the government expected to expand development in the mining and exploration sector.

“Mr. Speaker, to boost Kenya’s effort on green energy, I propose to exempt from VAT equipment for generation of solar and wind energy.”

Power producers who had signed a power purchase agreements with the government before April 2020 will also continue to enjoy VAT exemptions on taxable goods until the projects are finalized.

Real Estate Investment Trusts (REITs) Developers who transfer their developments such as affordable housing and special projects like students hostels will also qualify for VAT exemptions in order to deepen Capital Markets by encouraging investors to participate in REITs.

Losers

While betting craze has been subdued by the health pandemic, treasury has noted the effects gambling has had on society and proposed to reintroduce excise duty on betting at the rate of 20 percent of the amount wagered.

Importers of potatoes, peas, tomatoes among others will also be required to pay a duty rate of 30% for a year in order to protect local farmers from cheap imports.

Treasury also targets to encourage non-registered persons to join the National Health Insurance Fund by amending the Income Tax Act to allow contributions to the National Health Insurance Fund qualify for tax relief at the rate of 15% of the contributed amount.

Source: kbc.co.ke