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Government freezes employment for one year


Job seekers are among the biggest losers in this year’s budget as the government freezes employment for one year.

While presenting the budget statement before the National Assembly on Thursday, National Treasury and Economic Planning Cabinet Secretary Prof. Njuguna Ndung’u says the move to freeze employment is among a raft of measures that the government has taken to reduce its expenditure.

The government plans to reduce its wage bill which stands at  Ksh1.1 trillion through increased automation of its services.

Food imports

Kenyan farmers are also among those who are likely to be negatively affected by this year’s budget as the Treasury zero rates eggs, onions and other foods imports from the EAC region.

Local farmers have been grappling with cheap imports from the region due to a higher cost of production.

Imported textile and leather handbag prices will remain high as the government retains a 35 per cent import tax on the products.

Imported motorcycle prices are also expected to increase, as the treasury proposes a 10 per cent increase on fully assembled motorcycle imports.

“To protect local assemblers and create fairness and equity in taxation, I propose the introduction of excise duty on imported fully built motorcycles at the rate of 10% of the Customs value in addition to the specific excise duty rate of Ksh 12,952.83 per unit whichever is higher,” said Prof Ndung’u.

Beer lovers will also dig deeper into affordable beverages with high alcoholic content as excise duty on alcoholic beverages will be based on the centilitre of pure alcohol.

“I propose to review the excise duty structure on wines and beer from the specific rates per litre to the rate of Ksh 22.50 per centilitre of pure alcohol” the CS announced.

Treasury has also proposed to review excise duty structure on cigarettes.

“I propose to review the excise duty structure on cigarettes in line with research conducted and advice that has recommended harmonization of excise duty rates for cigarettes with and without filters. I propose to increase the excise duty rate from Ksh 1594 per kg to 2000 per kg on products containing nicotine to address their adverse effects on humans”.

Excise duty on betting, gaming, lottery and price competition has been increased from 15 per cent to 20 per cent as the government seeks to curb the vice.

“ Last year we raised excise duty on these activities from 7.5% to 12.5% to discourage participation, To further discourage this behaviour, I propose to increase the excise duty rates to 20%” he said.