Treasury Cabinet Secretary Njuguna Ndungu on Thursday afternoon presented Kenya Kwanza’s first budget of Sh3.6 trillion to the nation. This also is the first time Professor Njuguna Ndungu, a former Central Bank of Kenya governor presents the budget under President William Ruto’s government.
The budget comes against the backdrop of numerous external shocks that Kenya’s economy face, including the Russia-Ukraine conflict and post-Covid 19 pandemic effects.
The economy is also facing rising cost of living and a high debt, weakening shilling exchange rate against US dollar and rising fuel prices.
By 30th June, the Appropriation Bill will be tabled and passed by the House before it is signed into law by President William Ruto making the tail end of the budget making process.
Below is the 2023/24 budget at a glance:
15.05: CS Ndungu stands to present 2023/4 budget estimates
Government to increase investment in Agriculture, Micro-Small enterprises, Housing, Digital Super Highway and Health to improve livelihoods
Climate Change: Government steps up war against climate change through focus on green energy, e-mobility, green building to attain zero carbon by 2050.
Legal and Institutional Reforms: government to launch e-procurement system by December 2023. System to enable both county and national governments manage public procurement and Asset Disposal
Government to restructure balance sheet of KPLC to reduce current liquidity gap at KPLC
Unclaimed Assets: State proposes amendments to empower claimants to designate beneficiaries of the unclaimed assets.
Taxes; KRA to monitor businesses in real time to enhance tax collection and cub tax evasions, projects total revenue collection at Sh2.96 trillion.
Private Public Partnerships: Government activates Project Facilitation Fund to Fastrack PPP projects, the Fund expected to instill confidence in private sector to invest in public projects.
Agriculture; Government to work with private sector to provide subsidized fertilizer, CS Ndungu proposes Sh5b for the fertilizer programme.
Leather Industrial Park Sh350 million, animal disease control Sh130 million and Sh2.6b for aquaculture development
Hustlers Fund: Government adds additional Sh10b to hustlers fund to allow MSMEs access capital for business
Housing: CS Ndungu proposes to Parliament Sh35.2 billion for the housing programme, aims at availing 250,000 housing units annually and avail affordable mortgage.
Health: CS Ndungu proposes Sh141.2 billion to health sector aimed at supporting Universal Health Care.
Digital Superhighway and Creative Economy: CS Ndungu proposes Sh15.1 billion to fund initiatives in the ICT sector.
Transport Sector: Sh37.4 billion for SGR, 727 million for airports and airstrips
Energy Sector: Sh62.3 billion
Education Sector: Sh628 billion, Sh12.5b for free primary education, Sh65.4 billion for free day secondary education, Sh5billion for exam fee waiver, Sh1 billion for teachers promotion and Sh940 million for sanitary towels.
Manufacturing Sector: Sh26.9 billion
Tourism, Sports and Culture: Sh12.5 billion of which Sh6.4 billion will be channeled to Sports and arts and Sh2billion for the Tourism Promotion Fund.
Environment, Natural Resources: Sh43.3 billion
Governance/Fight against Corruption: Sh3.9 billion to EACC, Sh3.6 billion to DPP and 8 billion to Auditor General.
TAX MEASURES
Kenya proposes the inclusion of digital assets such as Bitcoin in the country’s tax regime through the 2023 Finance Bill. The tax rate proposed for digital asset transactions is 3 per cent of the exchange or transfer value.
VAT
LPG: CS Ndungu proposes to Parliament to Zero rate VAT on Liquid Petroleum Gas to promote good health and reduce cutting down of trees for charcoal and firewood.
Tea; To promote value addition, The CS proposed removal of VAT on tea purchased on factories for value addition.
Plastic and Rubber products: impose import duty at 35 per cent instead of 25 per cent.
EXCISE DUTY: The Cabinet Secretary proposes remittance to KRA within 24 hours instead of 20th of the following month. Increases excise duty on gaming, lottery and betting to 12.5 per cent from 7 per cent.
Fish imports to attract excise duty at 100,000 per metric tonne to discourage such imports.
Alcohol, betting: Print Media, TV stations, Billboards to pay 15 per cent of excisable value charged on adverts
Internet: Excise Duty reduced from 20 per cent to 15 per cent in respect of fees charged by service providers.
Cement: CS Ndungu proposes an excise duty of 10 per cent of excisable value on imported cement, this is to allow the struggling local cement companies to compete effectively.
Imported Furniture: Convinced that Kenya has capacity to locally produce furnitures, the CS has imposed excise duty at 30 per cent rate of customs value. However, the proposal will exclude furniture from East African Countries.
Income Tax
Landlords: tax reduced to 10 per cent to 7.5 per cent per month.
Start Ups: Defer taxes on gains offered to employees until the date of sale of shares
Digital Content: CS Ndungu proposes withholding tax of 5 per cent of Gross Amount
