The education sector is one of the biggest winners of Treasury CS Ukur Yatani’s 2021/2022 Budget.
The sector notably the Competency-Based Curriculum (CBC), Free Primary Education (FPE) Free Secondary Education (FSE), and recruitment of teachers have received billions in allocations.
Meanwhile, the gambling sector, importation of leather, steel and furniture products have been taxed heavily.
The Budget was read this afternoon in Parliament. Yatani had described it as a “recovery Budget”, seeing that Kenya was rebounding from the effects of the COVID-19 pandemic that saw a contraction of the tax bracket and reduced incomes.
CBC received KSh1 billion, FPE KSh12 billion, and FSE KSh62.2 billion. KSh2.5bn was set aside for recruitment of teachers.
Other big winners are the Kaazi Mtaani programme which will receive KSh 3bn, Bus Rapid Transit KSh700m and a KSh2bn kitty for loans for Small and Medium Enterprises in manufacturing sector.
Manufactuers of baby diapers will continue to enjoy duty free importation of inputs for another one year. Fresh food items imported outside the East African Community region will continue attracting a 30% duty.
The CS also announced that to protect the local leather industry market, a 25% import duty will be levelled on imported leather and footwear products.
“Jua Kali continues to thrive in the country, creating jobs. But these artisans face stiff competition from imported furniture,” said CS Yatani. The applicable 35% import duty on imported furniture was extended by one year.
Duty free window for importation of roofing tiles was extended by one year.
CS Yatani also announced a VAT exemption on de-congesters, supplements, laboratory reagents, breathing appliances, gas masks and other medical equipment. The VAT exemption also extends to inputs used in ventilators and breathing apparatus used in COVID-19 management.
The CS also proposed amendments to Income Tax Act. Yatani said these amendments would align the Act to international best practices to curb tax evasion, and expand definition of term “permanent establishment.”
“The Finance act 2020 introduced digital tax. But this tax doesn’t cover all traders,” he said. To this end, he proposed the expansion of this scope to include internet and electronic networks.
The 20% excise duty on betting, which was scrapped amid controversy has been re-introduced.
All categories of tobacco products, notably nicotine pouches now face an excise duty of KSh5 per gram.
Yatani, who speech was bereft of the razzmatazz that defines such sessions, recommend that rewards for whistleblowers on tax cheats be increased from KSh100,000 to KSh500,000, and where such whistleblowing leads to recovery of taxes, reward be increased from KSh1m to KSh5m.