Rotich expects the exchequer to collect Sh1.358 trillion in revenue through these tax measures/MIKE KARIUKI
Rotich expects the exchequer to collect Sh1.358 trillion in revenue through these tax measures.
The budget has an overall deficit of about Sh570.2 billion.
Among the tax measures include tax rebate schemes for employers training at least 10 students for six to 12 months under apprentice or attachment as well as increased duty rates on imported sugar from $200 to $460 per metric tonne to avoid unfair competition with local producers and salvage the ailing sugar sector.
The Cabinet Secretary has also increased import duty rate on plastic tubes for packaging tooth pastes and cosmetics from 10 percent to 25 percent in order to protect local manufacturers.
On residential and rental business, Rotich proposed to tax landlords on a growth rental income at 12 percent for income below Sh10 million per year. In addition, the CS introduced a tax amnesty for landlords who are outside the tax net.
Lotteries will also be taxed at five percent of turnover while road maintenance levy has been increased by Sh3 per litre of petrol and diesel that will be paid in the Road Annuity Fund.
“I have provided for importation of nylon yarn and synthetic twine used in the manufacturer of fishing nets under the duty remission scheme at a rate of 0 percent instead of 10 percent. In addition imports of made up fishing nets will attract duty at a rate of 25 percent instead of 10 percent to protect local manufacturers of fishing nets, “he said.
Film makers are set to get a boost as Rotich exempts them from withholding tax on all payment made by foreign film producers to actors and crew members. In addition, VAT for goods and services purchased for use of film making will be exempt.
Importation of aluminium milk cans has been increased to 25 percent from the current 10 percent in a bid to cushion local manufactures against cheap imports as well as increasing local production.
Rotich has also exempted VAT on plastic bags biogas digesters for use in the sector.
On capital gains tax that was effective in January 2015, the Treasury has removed the 5 percent tax on capital gains arising from the selling of shares and introduced a 0.3 percent withholding tax on transaction value of the shares.
On the other hand’ banks’ core capital requirements has been raised to Sh5 billion from the current Sh1 billion by December 2018.
Also exempt VAT includes taxable goods and services for use in the construction of infrastructure works in industrial and recreational parks of 100 acres or more.
“This measure is expected to make it attractive for both foreign and local investors to set up these parks in Kenya and create Jobs for our people, Rotich added.
The government plans to borrow externally about Sh340 billion while Sh229.7 billion and will be borrowed locally.
