Compared to the lofty 2007 Kenya budget, this one came at a serious time when the country had almost reversed gains made over the last five years, according to the Minister.
Challenges: regional disparities, poverty, youth employment low agriculture productivity, transport during crisis raised food prices, and containing inflation
Targets: 10% economic growth by 2012, Kenya to be a Middle income country by 2030, Social income reforms, develop a democratic issue-based political system and a higher quality of life
some excerpts
- Airlines: For Kenya airways: zero rate on international air travel no VAT on tickets?
Banking
- increase share capital from 250 million and 300m to 1 billion over 2 years(parliament rejected this last year) and can’t pay dividends till adequate provisions are made.
- 5 development finance institutions to be restructured, as will Postbank and the agriculture finance corporation. National bank will be privatized (further)
- CBK can penalize forex bureaus for violations
- Fate of unclaimed deposits to be decided by a task force to be formed
- BRIC China and India will keep food and oil high, but there are regional Africa opportunities
Capital markets
- NSE reporting: companies like Safaricom and kengen can publish their notices and accounts in two daily newspapers as opposed to mailing each shareholder a copy
- Insurance companies can invest 10% in any listed company – up from the previous 5% ceiling
- Annuities to publish quarterly returns
- Asset backed securities rules will be gazetted to encourage particplants
- Share capital of stockbrokers and i-banks raised to 50 million and 250 million respectively as anyone owing more than 25% barred from running the companies (3 years to comply). They must also get indemnity insurance for failure of employees
- CMA to get more power to seize assets
CDF: CDF benefits not tricked down due to poor management and there will be more accountability to reduce duplication. does that mean less funds for CDF now?
Education
- 1.56 billion towards teacher employment
- Teachers kids' education now not a taxable benefit for employers and teachers
Energy
- NOCK (parastatal) expanded to stabilize petrol prices
- clean energy: 4 billion for geothermal, 300 million solar electricity generated to supply 74 public institutions, 200m for wind power generation
- 6.8 billion for rural electrification (to develop mini grids) which will reduce rural urban migration.
Food prices
Minister says food price beyond the control of government
- Maize imports duty free
- talks to set up a regional fertilizer factory with Uganda and Tanzania
- 744 million for agric extension programs
- zero duty on bread and rice
- duty reduced from 35 to 10% for one year on wheat imports
- no duty on insulated tankers for milk transport
Health
- more nurses to be hired
- 550 million to support guardians of HIV orphans and this will benefit 30,000 households - up from the current 2,500
Housing
- Housing bill, landlord & tenant bill coming
- 350 million to construct 200,000 low cost housing units using appropriate building technology
- 500 million for infrastructure in slums
- National housing corp: relief for buyers of their houses – up to 150,000 p.a.
ICT
- 900 million shillings to develop a business process outsourcing park in Nairobi (BPO) which may create 10,000 jobs
- 700 million towards completion of Under sea cable improve bandwidth quality, reduce costs of communications.
- Remove import duty on telecommunication equipment as well as on printers
Land
- No stamp duty transfer for land transfer by individuals to companies wholly owned by families
licensing:
- communication commission of Kenya will reduce the number of licenses offered from 300 to 16 from July 2008, Ministry of tourism reduces from 25 to 2, Mines & geology 24 to 8, Betting control 26 to 9, Forestry from 15 to 11
- Business regulatory reform commission to be created
Manufacturing
- Remove import duty on hot rolled steel (was 10%)
- New 10% tax sodium sulphate, epoxy resin) to protect local producers
- Reduce import duty on cement form 40% to 25%
- Tax on plastics: manufacturer's can apply to get refunds of this tax get in line
Northern Kenya
- 2.9 billion shillings to the arid and semi arid areas rehabilitation through various ministries: this will include water, abattoirs, school feeding programs, rural electrification, livestock support
- also 900 million for the garissa garsen hola road (done by NYS) and for 200m improve marsabit and maralal water supplies
Parliament
- the Minister was interrupted for not sharing budget information for MP's in good time
-The Minister later asked members of parliament and constitution office holders to pay their share of income taxes
Ports:
- Mombasa port will be expanded with 20 billion of Japanese funds to allow bigger ships
- Free port at Mombasa to be set up (like Dubai) which should create jobs for the youth
Privatizations more coming to fix budget shortfall
Railway: Government wants Rift Valley Railways to increase capacity, lay more tracks, and transfer cargo.
Retirees: No tax on all pensions for those over 65 years
Roads:
- 65 billion shillings to be spent
- Build Athi river-namanga, mau summit – kericho, Nairobi to Thika
- Register all road contractors, engineers, quantity surveyors
- Long term infrastructure bond
Security:
- More funds for police force salaries, and equipment to fight crime
- Organized crimes bill to control gangs and militia and an anti money laundering bill coming to parliament
- 2.8 billion for new housing for police and prisons staff
Shilling central bank will not be intervening to adjust exchange rates
Sin taxes: beer and alcohol to cost more
Sports & arts
- Artist and sportsmen; any tax paid abroad can be used to offset against tax in Kenya if they show evidence of payment
- National football competition in every constituency (1 million shillings per constituency for purchase of kit and balls)
Tourism: budget 26% up
- 600 million to KTB to promote Kenya
- Exempt import duty gym equipment for hotel industry
Youth employment
- Absorb NYS graduates into armed forces
- Youth enterprise fund gets another 500 million
- 465 million for free tuition in vocational colleges from January 2009
- The 900 million shilling garissa hola road will be built by NYS who will also get contracts to fix dams across country - and who will also employ local youth
Water & environment
- 26% water budget improvement
- 1 billion towards multipurpose dams (built by NYS)
- 2nd mzima springs project to supply Mombasa with water.
- program to clean up Nairobi river
- Remove import duty on garbage collection trucks
Vehicles
- motorbikes: Zero VAT to motorcycles less than 250cc
- Vehicles to be registered as soon as they arrive in the country to prevent diversion of transit vehicles to local market