Treasury CS Henry Rotich yesterday presented the budget for the 2017/18 fiscal year, which has been designed to spur consumption, woo investors and promote local goods.
The budget worth Sh 2.6 Trillion is the highest to ever be presented and has been read two months in advance before the traditional 1st June period, because of the August elections.
WINNERS 2017/18 BUDGET
Manufacturers and the agricultural sector are some of the biggest winners in this year’s budget;
Mr Rotich issued incentives to manufacturing sector to create more employment to the youth. Sh450 million has been set aside for modernization of Rivatex and another Sh250 million towards the modernisation of New KCC. Special Economic Zone in Kisumu, Mombasa, and Nairobi to be exempted from VAT besides infrastructure plans.
The agricultural sector, which is arguably the biggest contributor to the economy, received Sh15 billion from the 2017/18 budget. https://www.standardmedia.co.ke/article/2001234546/agriculture-gets-sh15b-in-budget-uhuru-s-budget
Rotich also announced tax exemption on tourist vehicles assembled locally, tax inputs for manufacturing pesticides and also waived duty on maize and wheat imported in the next four months.
This is good news to consumers as it will see the prices of unga, which have recently rose to an average Sh 137 for the 2kg packet drop.
“Manufacturers, wholesalers, and retailers who sell such goods will be expected to reduce the prices of these basic commodities, failure to which, I will reverse the policy,” Mr Rotich said.
The government has also set aside Sh4 billion for exam fees waiver to 2017 KCSE and KCPE candidates.
The allocation for devolution has also been increased. Counties will now get Sh329 billion, which translates to 35 percent of the total revenue raised nationally.
Those earning less than Sh13,486 will also be exempted from income tax. Their bonuses, overtime and retirement benefits will also be tax exempt.
LOSERS 2017/18 BUDGET
The thriving Gambling industry is perhaps the biggest looser in the jubilee government’s last budget for the first term in office after the government raised taxes in the sector (lottery, gambling and gaming) to 50 percent from the current 7.5 percent.
“This will help to tame gambling in the country which has gained popularity among the youth and a large population,” said Rotich in his Budget speech.
Rotich also announced a job freeze in the public service except for critical sectors such as education as a move to cut on the soaring public wage Bill.
The tax rate of high value spirits has also been increased to Sh200 a litre from Sh175 a litre.
The fiscal deficit for 2017/18 is 524.6 billion shillings, equivalent to 6 percent of GDP and will be financed through borrowing from both external and domestic resources.
“The net external financing will amount to 256 billion shillings, or 2.9 percent of GDP, and will be mainly on non-concessional terms.
Domestic borrowing will be 268.6 billion shillings or 3.1 percent of GDP,” Rotich said.