Budget 2017/2018: Biggest Winners and Losers

Kenyans can now breathe a sigh or relief after the government announced a zero-rate tax on bread and maize flour.

This comes amid complaints from around the country of the rise of these basic commodities with flour currently retailing at Ksh150 and Ksh50 for 400g loaf of bread.

In his budget speech at the National Assembly, Treasury Cabinet Secretary Henry Rotich further announced tax free of importation of white maize into the country for the next four months.

The CS said this move is aimed at a reducing the price on basic commodities and the effects of inflation.

Winners

In the estimated Ksh2.6 trillion budget, the CS further proposed to exempt locally assembled tourist vehicles from VAT, a move he says would boost the sector which has recorded growth despite the challenging times that saw the sector slapped with bans from across the globe.

The farmers also have something to smile about after the government allocated Ksh4.1 billion for subsidised fertiliser and an additional Ksh100 million for mechanisation of agriculture. This according to the CS would boost the sector.

“To enable propel the Agriculture sector, I have set aside Ksh300 million for community-based irrigation projects”, added the CS

The government has further allocated Ksh100 million for the revival of pyrethrum sector.

Civil servants are among the winners in the 2017/2018 budget after the government allocated Ksh20 billion shillings for phase 1 of public service pay review by the Salaries and Remuneration Commission.

Civil Servants will also get decent housing after the allocation of Ksh1.5 billion for the construction of new civil servants houses.

The elderly also featured in the 2017-2018 budget after the government announced that all Kenyans above 70 years would now be eligible to benefit from Cash Transfers and NHIF Cover from January 2018.

Losers

The greatest losers in this year’s budget were the betting, lottery, gaming and competition sectors that saw an increase in tax from 7.5 per cent, 5 per cent, 12 per cent and 15 per cent to a uniform 50 per cent for all categories.

This, according to the CS, would see the proceeds channeled to the newly created National Sports, Culture and Arts Fund to support sports, culture and art in Kenya.

The alcoholic beverages sector was also dealt a blow after the tax rate of spirits was increased from Ksh175 to Ksh200 per litre.

“I propose 80 per cent remission of excise duty on all alcoholic drinks made of locally produced millet, sorghum excluding barley” said Rotich

At Ksh2.6 trillion, this is Kenya’s largest budget, the CS was keen to indicate the government’s plan to raise the funds from borrowing from internal and external sources.

The fiscal deficit now stands at Ksh524.6 billion, equivalent to 6 per cent of GDP.