‘Sin tax’ goes up as government seeks to fund Ksh 2 trillion budget

The government has increased taxes on fuel to help fund the historic Ksh 2.1 trillion budget.

During the unveiling of the 2015/2016 Financial Year budget by Treasury Cabinet Secretary Henry Rotich, the government introduced a levy of Ksh 3 per litre.

This means that motorists will have to spend more on every litre of fuel.

Rotich said that the levy will help raise funds to be paid into the Road Annuity Fund to scale up the existing and proposed road networks.

Others caught up in the tax increment mix are alcoholic drinks consumers, smokers, manufacturers of plastic paper bags and landlords.

However, the Treasury CS did not give an exact value of tax (‘sin tax’) increment for beer and cigarettes but mentioned that new tax measure will raise additional revenue of about Ksh 25 billion.

Plastic paper bags manufacturers and users were also not spared after the government imposed an enhanced tax on non-biodegradable plastics.

This will see them pay an additional Ksh 120 for every kilogramme of non-biodegradable plastics produced.

For landlords earning a rental income of Ksh 10 million and below will also pay a 12 per cent tax on gross rental income. Those earning above this figure will enjoy the benefit of deducting expenses incurred in running and maintaining the houses.

The Treasury boss further offered a tax amnesty to landlords who have not been compliant in paying taxes.