2018/2019 Budget: The winners and losers


2018/2019 Budget: The winners and losers
National Treasury Cabinet Secretary Henry Rotich during the unveiling of the 2018/2019 budget. PHOTO| TWITTER| @IMGKenya

In Summary

  • Local manufacturers in the steel, textile and timber are among some of the big winners in  2018/2019 budget unveiled by National Treasury Cabinet Secretary Henry Rotich on Thursday.
  • Cancer patients may now have it easier after Ksh.7 billion was allocated for cancer screening machines and further Ksh.400 million for a cancer institute in the country to promote early diagnosis and thus boost chances of treatment and recovery.
  • Mobile Money transfer services MPESA, T-Kash, Airtel Money and Equitel customers will now be charged 12% up from 10 percent of every cost of transferring cash they incur.

Local manufacturers in the steel, textile and timber are among some of the big winners in  2018/2019 budget unveiled by National Treasury Cabinet Secretary Henry Rotich on Thursday.

In the spirit of promoting local manufacturers under the mantra, buy Kenya Build Kenya, CS Rotich introduced what may be termed as punitive tax measures on cheaper imports of products that are locally available.

Local steel manufacturers stand to benefit with the raising of import duty from current 25 percent to 35 percent on iron and steel products produced in the region.

Textile and footwear imports will attract an import duty of the higher of 5 US dollars per unit or 35 percent of the value. That should then boost the market for local textile and footwear manufacturers.

The timber industries have a space to thrive. Wood products from the region will now be taxed at 110 US dollars equivalent to 11,000 shillings per metric tone of particle board. A Metric tonne of plywood will attract more tax at 230 US dollars (Ksh.23,000).

And now start preparing to pay higher for imported vegetable oil, than locally produced products. For every Metric tonne or 415 litres of vegetable oil imported 500 US dollars or 50 thousand Kenya shillings will be payable to the Kenya Revenue Authority (KRA) or 35 percent of the value whichever is higher.

Other gainers are local manufacturers of pesticides and acaricides, tour operators and energy cooking stoves who have had their taxes either reduced or imports from the region taxed higher.

Assemblers of computers will now have parts they import or purchase locally exempted from tax. This is aimed at encouraging local manufacture, innovation and job creation.

To boost food security, grain storage facilities will become cheaper as equipment for their construction is again tax exempted.

Livestock farmers you have happier days ahead, or is it? The raw materials for animal feeds are now exempted from tax.

Cancer patients may now have it easier after Ksh.7 billion was allocated for cancer screening machines and further Ksh.400 million for a cancer institute in the country to promote early diagnosis and thus boost chances of treatment and recovery.

Other beneficiaries are vulnerable groups in the society and learners in Public primary schools that have now been allocated more funds or tax incentives granted.

No one loves to lose, but for the sake of this report, there are industries that will pay more to do business.

If you have a sweet tooth, an excise duty of Ksh.20 per kilo of confectionaries and chocolates will be effective as soon as the budget statement is approved.

Mobile Money transfer services MPESA, T-Kash, Airtel Money and Equitel customers will now be charged 12% up from 10 percent of every cost of transferring cash they incur.

If you deal in large volume of money, you will now incur a 0.05 percent of excise tax for every Ksh.500,000 you transfer at a bank or financial provider. May be you can limit it at 499,999 shillings? Just a thought.

High end car owners above 2500 cc for diesel cars and 3000 cc for petrol run automobiles, an excise duty of 30 percent awaits you at your next purchase, up from 20 percent.

Under income tax measures, small and medium enterprises, you have a new tax to pay. Above the business permit you pay to your county government, a presumptive tax of 15 percent on that license fee has been imposed.

Dividend earnings now will attract a withholding tax charge of 5%, and this replaces compensating tax that has been charged previously.

Finally, scrap metal exporters, those who sell copper waste and scrap outside the country, you’ll pay 20 percent as export levy.

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Story By Sam Gituku
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