Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
A majority had expected changes on the VAT Act 2013 to cut cost of basic goods, but Rotich instead touched on introducing VAT regulations that would help clarify ambiguous aspects of the Act/MIKE KARIUKI

Kenya

No immediate change in cost of basic goods

A majority had expected changes on the VAT Act 2013 to cut cost of basic goods, but Rotich instead touched on introducing VAT regulations that would help clarify ambiguous aspects of the Act/MIKE KARIUKI

A majority had expected changes on the VAT Act 2013 to cut cost of basic goods, but Rotich instead touched on introducing VAT regulations that would help clarify ambiguous aspects of the Act/MIKE KARIUKI

NAIROBI, Kenya, Jun 12- Kenyans should not expect any immediate rise or fall in the cost of basic goods following presentation of the Budget Statement by Treasury Cabinet Secretary Henry Rotich on Thursday.

A majority had expected changes on the VAT Act 2013 to cut cost of basic goods, but Rotich instead touched on introducing VAT regulations that would help clarify ambiguous aspects of the Act.

“Parliament in 2012 enacted a new VAT law. This new law has made it easier for taxpayers to comply and significantly reduce the monthly claims for VAT refunds,” Rotich said without touching on prices of goods.

According to the CS, the main focus is how the VAT Act will simplify tax administration by helping the business people get their refunds easily at the Kenya Revenue Authority (KRA) which he believes will have a long term impact on the economy.

“We recognise the burden the private sector faces. We are looking for long-term solution to this,” he said.

The implementation of VAT Act in September last year of 16 percent tax led to increase in the prices of key commodities like processed milk, cooking gas, electricity, exercise and text books, mobile phones, animal feeds and the film.

“In this Budget Statement, there are no direct implications. Someone will not wake up tomorrow and find the price of bread or milk gone up,” PKF Tax Consultant James Mulili said commenting on the budget.

Some of the major tax measures announced by Rotich included scraping duty on solar machinery imports with the aim of increasing access to power for many Kenyans.

The government has also increased duty on iron imports from between zero to 10 percent to 25 percent to discourage scrap metal imports as the government targets to raise close to Sh2.6 billion.

“Our steel mills are closing down due to unfair competition from cheap imported iron and steel products,” Rotich said adding that this move will also help create more jobs for the youth.

Advertisement. Scroll to continue reading.

The 2014-15 Budget did not really go in-depth in terms of explaining to Kenyans how the government plans to increase its revenue of Sh1.2 trillion.

According to Mulili, there should have been at least one or two plans on how the government plans to widen the tax base especially by taxing the informal sector.

“This could double the amount we are expecting to collect of Sh1.2 trillion. I don’t think we would even need to borrow anyone.”


This year’s gross deficit will be about Sh342billion with plans to raise Sh132 billion out of it from Eurobond.

Mulili says the Eurobond is both a positive move because there will be less pressure on local borrowing hence control the interest rates but may have a negative impact if the government will not have a proper payback plan.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...