Tax firm lauds Treasury’s new regime for landlords

June 12, 2015
Shares

,

Rotich proposed to tax landlords on a growth rental income at 12 percent for income below Sh10 million per year. In addition/FILE
Rotich proposed to tax landlords on a growth rental income at 12 percent for income below Sh10 million per year. In addition/FILE
NAIROBI, Kenya, Jun 12 – Economic experts have lauded National Treasury Cabinet Secretary Henry Rotich for his proposal to increase the taxes regime for landlords in the 2015/2016 Budget.

According to the Grant and Thornton Company, this is one of the ways in which revenue can be generated to fund other projects within the government’s agenda.

Tax Director Samuel Mwaura however pointed out that Rotich should have tapped more from the informal sector through taxation instead of depending on foreign investors.

“This is the best way to move forward in this country in the sense that the government had to increase taxes and look for ways of tapping in new tax payers into the tax brackets. It would have been better also apart from what he did to the landlords to have introduced other rates to the so called informal sector. That is where the money is lying,” he stated.

Rotich proposed to tax landlords on a growth rental income at 12 percent for income below Sh10 million per year. In addition, the CS also introduced a tax amnesty for landlords who are outside the tax net.

The Advisory Partner at the firm Parag Shah however described the budget as ambitious and stated that it Kenyans would be waiting to see whether the promises will be fulfilled.

“If you also generally look at Kenya with the new infrastructure projects coming in, it has become sort of a reality that for any growing economy, the infrastructure should support the economy. There has been a proposal of 10,000km of roads, so about 314 km and another 127 kilometres are in the pipeline already started. So we are very far off from the original target of 10,000km,” he said.

“The government is trying to find the avenues of how best to fast track this so that the project can take off and how we can make good of it. There is also a lot of focus on the renewable energy. Kenya has had a deficit, Increasing the power rate has made the cost of living here very expensive,” he stated.

In his budget statement on Thursday, Rotich allocated Sh223.9 billion to the security sector during the 2015-2016 financial year, a Sh27 billion increase from the previous allocation.

He said Sh112 billion will be channelled to the Ministry of Defence and the National Intelligence Service.

The Interior Ministry will be allocated a massive Sh102.4 billion in a bid build on the security measures already in place which include enhancing mobility and modernising the service.

Counties on the other hand were allocated a total of Sh287 billion during the same financial year.

Rotich stated that this amount which includes shareable revenue of 259.7 billion and an additional conditional allocation of 27 billion will be used to fund various projects within counties.

The Treasury CS pointed out that this represents 37 percent of the most recent audited revenues approved by the National Assembly which amounts to 776.6 billion in financial year of 2012/2013.

The Jubilee Government is determined to fulfil its pledge to provide free laptops to all schools with the Treasury allocating Sh17.6 billion in the budget.

The Cabinet Secretary stated that the funding will not only help in acquiring laptops but other ICT devices which will help students become E-compliant.

He stressed that this will also build the capacity of teachers and increase their efficiency.

Shares

Latest Articles

Stock Market

Most Viewed