This year’s budget decreases by Ksh 134 billion

Written By: Regina Manyara- Gitau
491

This year's budget decreases by Ksh 134 billion

In a departure from the past, this year’s total budget was a slight reduction when compared to last year’s by Ksh 134 billion.

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Over the years, the total budget has been going up, but in a departure from this, the government has reduced the budget from last year’s figure of 3.15 trillion shillings to 3.02 trillion shillings this year.

Gambling, consumers of alcoholic drinks and tobacco products were hit by higher tax measures while those intending to invest in recycling companies will pay corporation tax at half price.

Excise duty on cigarettes, wines and spirit was increased by 15 per cent in measures aimed at boosting excise revenues.

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This will see alcoholic beverages and cigarettes retail at Ksh 136 for a 750 ml bottle of wine which is Ksh 18 more above the current price, a 750ml bottle of whisky  will retail at Ksh 182- Ksh 24 costlier while a pack of cigarettes  will retail at Ksh 61 per pack  Ksh 8 above the current rate.

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Those in public service will no longer receive per diems when they travel on official duty, rather they will be given preloaded cards in measures aimed at streamlining public expenditure.

This was perhaps informed by challenges in financing the budget that has seen an outcry that the public debt was growing.

In his budget speech, National Treasury Cabinet Secretary Henry Rotich said the fiscal deficit including grants will be Ksh 607.8 billion translating to a fiscal deficit of 5.6 per cent, which is a decline from 6.8 per cent in the current financial year.

To contain the negative social effects of betting on the young and vulnerable members of the society, Rotich introduced excise duty on betting activities at the rate of ten per cent of the amount staked.

Public officials were also not spared with the electronic cards proposed to be pre-loaded with subsistence allowance for use by those travelling within and outside the country.

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Under the new policy procurement of government, vehicles sat both county and national level will be sourced from local assembling plants a move that is expected to not only cut down on government spending but also support the local motor vehicle assembly industry.

To maintain road safety boda-boda operators will be required to get insurance covers for both their passengers as well as pedestrians.

Those to invest in recycling are expected to benefit from corporation tax at 15 per cent which is half what other corporates pay.

Rotich proposed to reduce the rate of VAT withholding from 6 per cent to 2 per cent to reduce the rate accumulation of VAT withholding that he says was affecting smooth business operation owed to delay to tax refunds.

In CS Rotich’s fiscal policy, he consolidates three funds; Uwezo Fund, Youth Enterprise Development Fund and Women Enterprise Development Fund into one, to be known as Biashara Kenya Fund; this entity will support the youth, women and persons living with disability to access credit.

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Key infrastructural projects were prioritized in the budgetary allocation with Ksh 180.9 billion set aside for road construction and maintenance, Ksh 5.5 billion for the phase two of the Standard Gauge Railway, while Ksh 7.2 billion has been set aside for the Mombasa Port development.

In agriculture, coffee farmers are to access cherry advances at 3 per cent interest after a Ksh 3 billion capital injection to the coffee revolving fund, Ksh 1 billion has been earmarked for crop development and boosting miraa farming.

In conclusion, in light of increased cases of pilfery of public coffers and to support the fight against graft, the Ethics and Anti-Corruption Commission is to receive Ksh 2.9 billion, the Office of the Director of Public Prosecution Ksh 3 billion, while Ksh 5.7 billion has been set aside to support operations at the office of the Auditor General.

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