By Joseph Bonyo
NAIROBI,KENYA: Ambitious is the immediate reaction one gets from the budget statement read by cabinet secretary for national treasury Henry Rotich.
The cabinet secretary played to the script of the Sh1.6 trillion budget that Deloitte East Africa tax partner Nikhil Hira had earlier noted as scary.
But to give credit where it’s due, the statement also went ahead and issued some bold statement that as gate keepers we will be keen to follow up on implementation. Striking for me in this budget is the attempt by the national treasury to promote and grow the use of railway in this country.
To this end, the minister is proposing a 1.5% Railway development levy on all imported goods in order to mobilize an additional sh15 billion to fund the construction of a standard gauge railway line from Mombasa to Kisumu.
What most Kenyans need to know is that while the move is welcome and the use of railway for transport especially for bulky cargo, we are a net importer of goods. Basically, the retail price of most of the imported goods we consume will definitely go up. This blended with the fact that retail prices are left at the mercy of retailers.
The subtle message being sent here by the government of Uhuru Kenyatta is that they are out to promote the maxim of Buy Kenya, build Kenya. This can also be best explained by the fact that there is a proposal to increase import duty on among other welding electrodes, millstones and grindstones as well as plastic tubes or packing cosmetics, toothpaste and similar products.
Positive too on the statement is the bold move towards promotion of renewable energy and an exemption of plastic bag bio-digesters.
The move to amend the insurance act to conform to international best practices as well as open the industry for foreign ownership is also a move in the right direction. Insider trading within the capital markets has also been a menace with suspects getting off lightly. Tightening the legislation I believe will slow down such cases if not eradicate them.
A sh52.3 billion allocation for the school laptop project is also another striking bit of the statement. The laptop debate has been way before Kenya went to the polls. With clarity on what is going to be spent on it, the whole picture must now be painted clearly on the how it will be implemented. My opinion however still favours computer labs for schools and not one laptop per child for class ones.
One area however where the cabinet secretary has chosen to relieve Uhuru Kenyatta’s times at the National Treasury is to offer tax rebates for companies that offer internships. Three years ago the same was proposed and the Kenya Private Sector Alliance made attempts but did not go far with. We will be watching for the implementation.
Mr Joseph Bonyo is the Business Editor-KTN
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