- Welcome
Welcome to the Business Daily's live blog of the budget presentation this afternoon in Parliament. Treasury Secretary Henry Rotich is due to present the spending plan for a Sh2.62 trillion budget for the next (2017/2018) financial year.
- No new taxes
While Mr Rotich has promised not to introduce any new taxes, the budget requires a significant growth in tax revenues.
The Kenya Revenue Authority (KRA) is expected to raise an additional Sh300 billion in tax revenues -- from Sh1.4 trillion in the current financial year to Sh1.7 trillion next year. - Tough balancing act
The KRA faces an uphill task in meeting the revenue collection target next year, in the face of an economy where companies have been downsizing and profits have been falling, ahead of the forthcoming August 8 General Election. READ about Rotich tax headache.
KRA has consistently missed the quarterly revenue targets in the currently financial year. - Treasury Secretary Rotich presenting the budget
Rotich says revenue collection has increased from Sh1 trillion in 2013 to 1.45 trillion in 2016. There have been about 2.3 million new jobs since 2013, he says.
He touts a number of Jubilee government achievements including growing tourism sector, investment in the energy, health and education sectors. - Cost of doing business
Rotich allocates Sh250 million to ease the cost of doing business. To propose legislation on how county governments may raise revenues without violating the Constitution or raising the cost of doing business. - Rotich: Sh21.4 billion has been allocated to the Independent Electoral and Boundaries Commission (IEBC), in addition the Sh19.3 billion already allocated this year.
- Rotich: We plan to cut spending
Rotich proposes new guidelines on planning of capital projects. Treasury will operationalise a Treasury single account starting July this year.
Harmonisation of salaries and allowances to start in July, and has been allocated Sh20 billion. Recruitment frozen except for crucial sectors. - Interest rate caps
Rotich: Implementation of capping rates has reduced loan uptake. Comprehensive assessment will be done, in conjuction with the Kenya Banker Association, to assess its impact, which will inform intervention measures. - CS Henry Rotich presenting the National Budget. #AskDeloitte BudgetKE2017 on key changes and implications pic.twitter.com/FjcmM8j4Km
- Rotich proposes Insurance act amendment to provide for perpetual licensing of insurance agencies
- M-Akiba bond
Retail bond via mobile phone expected to foster investment and savings culture. Wanjiku can now invest Sh3,000 and above without risk. This will fund infrastructure. Rotich says that within a week, Kenyans have taken up Sh79 million, more than half of the bond's value. - 68,399 Kenyans have registered for M-Akiba
- Infrastructure
Sh10 billion allocated for Lapsset project, Sh2.6 billion for Malindi, Isiolo and Lokichoggio airports - Oil and gas
Sh3.8 billion allocated for exploration and distribution of oil and gas. - Govt has allocated for Sh450 million for textile firm Rivatex, Sh250 million for modernisation of New KCC and Sh1.6 billion for leather industrial park.
- Agriculture sector
Sh6.3 billion has been allocated to expand and support irrigation projects including in Bura, Mwea and Galana. Sh1.3 billion will go to the Strategic Grain Reserve, Sh100 million to support pyrethrum farming and Sh1 billion for the miraa sector. - Blue economy
Govt supports construction of offshore patrol boats to deter illegal fishing. Also supports designated fish landing ports, which have been allocated Sh400m, Sh300m allocated for aquaculture technology. - Climate change
To mitigate climate change effects, Sh3.8 billion has been allocated for environmental conservation and Sh2.2 billion will go to the meteorological department. - Additional teachers
Sh2 billion allocated for recruitment of additional teachers - Cash stipend
All Kenya above 70 will receive a cash stipend of Sh2,000, and their NHIF cover will be paid by the government. Cover for people with disabilities, aged 65 and above, to continue. Sh2.1 billion allocated for affirmative action in order to promote equity. - Rotich: Sh200 million for a sports academy, Sh550 million for completion of ultra modern library in Upper Hill, Nairobi.
- Revenue collection
Revenue collection targeted at Sh1.7 trillion, which is 19.6 of GDP. Deficit is at Sh524.6 billion, which is 6 per cent of GDP. To plug the financing gap from internal and external borrowing. Govt to source Sh256 billion from external sources. - VAT exemption for medical equipment for specialised hospitals, packaging material intended for fish packaging
- Gaming tax raised to 50pc
Rotich raises taxes for gaming, betting and lottery companies from the current 7.5 per cent to a uniform tax of 50 per cent on revenues. Proceeds to fund the arts, culture and sports. - Cost of maize
White maize to be imported on tax-free basis for four months. Dates also to be tax-free during Ramadhan period.
Bread and maize flour zero-rated, sellers expected to reduce costs, if not this will be reversed.
Summary: Key points
Cabinet Secretary Rotich has finished reading his speech. Among the highlights of the budget statement include:
1. 50 per cent tax on betting, lottery, gaming sector proposed; proceeds to go towards development of the arts.
2. Bread and maize flour to be zero-rated, importation of maize in the next four months to be duty-free.
3. Lower corporate tax on vehicle assemblers from 30 per cent to 15 per cent for the first five years of establishment in Kenya.
4. Fiscal deficit for this financial year is Sh524.6 billion, to be sourced from both domestic and foreign financial sources.
5. Sh200 million allocated for the establishment of a sports academy.
6. All foreigners that win tenders will be expected to source at least 40 per cent materials from local market to enhance job creation.
7. CS Rotich proposes monthly stipend and NHIF cover for persons above 70 years, says Kenya cares for its old.
8. Sh4.3 billion allocated to maternal healthcare programme, Sh9 billion to Kenyatta National Hospital, Sh700 million for cancer services.
9. Sh2 billion allocated for recruitment of additional teachers.
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