Kenya: Key Highlights of the 2021/22 Budget Allocations

Government Expenditure and Net Lending - Sh3.03 trillion

Ministerial Recurrent Expenditure - Sh1.27 trillion

Ministerial Recurrent Expenditure include Judiciary - Sh15.6 billion and Parliament Sh35.8 billion

Ministerial Development Expenditure - Sh669.6 billion

Interest Payments and Pensions - Sh697.5 billion

Contribution to civil servant pensions - Sh20.8 billion

Equitable share to Counties - Sh370 billion

Supporting Manufacturing for job creation - Sh20.5 billion

Enhancing Food and Nutrition Security to all Kenyans - Sh60 billion

Providing Universal Health coverage to guarantee quality and affordable healthcare to all Kenyans - Sh47.7 billion

Provision of Affordable and Decent Housing for all Kenyans - Sh13.9 billion

Economic Recovery Strategy - Sh23.1 billion

Enhanced security for stability, investment and growth - Sh302.1 billion

Investing in infrastructure to unlock growth potential - Sh310.7B billion

Enhancing access to quality education outcomes - Sh202.9 billion

Environment management and protection, flood control and water harvesting - Sh93.2 billion

Equity, poverty reduction & social protection for vulnerable groups - Sh103.4 billion

Leveraging on Information, Communication and Technology - Sh23 billion

Sh409.8 billion - Transfer to County Governments Including: Equitable Share Sh370billion and Conditional Allocation Sh39.8 billion

Taxes

Customs Measures

- Finished Iron and steel products to be imported at 25 per cent or corresponding specific rate;

- Import duty on leather and footwear products at 25 per cent or corresponding specific rate;

- Unassembled motorcycles at 10 per cent under Duty Remission Scheme.

- Inputs used in textile and apparel sector at 0 per cent under the Duty Remission Scheme;

- Import duty on furniture products at 35 per cent duty rate;

- Inputs for manufacture of baby diapers at 0 per cent under Duty Remission Scheme;

Value Added Tax Measures

- VAT exemption on Health Products and Technologies to boost health sector.

- VAT exemption on goods used in geothermal, oil and mining projects.

- VAT exemption on equipment for generation of solar and wind energy.

- Transitional VAT exemption on goods used in power generation under power purchase agreements

- VAT exemption for asset transferred to Real Estate Investment Trusts and Asset Backed Securities

- Bread exempt from VAT instead of being both exempt and zero rated.

Excise Duty Measures

- Rebate on excise duty paid on internet data services purchased in bulk for resale.

- Excise duty on locally manufactured sugar confectionary and white chocolate.

- Removed excise duty on imported glass bottles.

- Changed excise duty rate on Motorcycles from Sh11,608.23 per unit to 15 per cent.

- Excise duty on nicotine pouch at Sh5,000 per kg.

- Excise duty on betting at 20 per cent of amount wagered.

Income Tax Measures

- Removal of limitation for carrying forward of losses under Section 15(4) of income Tax Act

- Thin capitalisation rule changed from debt-to-equity ratio to 30 per cent of earnings before interest, taxes, depreciation and amortization.

- National Health Insurance Fund to qualify for insurance relief.

- Tax rebate extended to employers engaging TVET graduates as apprentice.

- Management and professional fees under the extractive sector harmonized with service fees, in the same sector, at 10 per cent.

Fees and Levies

- Import Declaration Fee (IDF) and Railway Development Levy (RDL) exemption on goods in imported public interest, or to promote investment above Sh5 billion.

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