Treasury Secretary Ukur Yatani has presented his Sh2.7 trillion Budget for the year starting July 1, outlining the spending plans, including the taxation measures to finance the proposals.
The budget includes a stimulus package to jumpstart an economy ravaged by the Covid-19 pandemic.
Here are some of the highlights:
ECONOMY: Government projects the economy to grow at a lower rate of 2.5 percent in 2020, down from the 5.4 percent growth recorded in 2019. 2021 growth forecast at 5.8 percent and 6.5 percent by 2024.
BUDGET DEFICIT: Treasury CS said the government has set a budget deficit of 7.5 percent of the GDP for the financial year 2020/21 following the impact of coronavirus, locust invasion and flooding. The targeted fiscal deficit for the year ending June 30 has been revised from 8.3 percent of the GDP to 6.3 percent.
SMES: Treasury CS has directed ministries, departments and agencies to clear all pending bills failure to which funding will be withheld.
EDUCATION: The Government has waived examination fees for KCSE and KCPE candidates.
TAXES: Treasury has imposed a one percent minimum tax on revenues for all companies, targeting firms that repeatedly declare losses to run away from taxes.
Tax cheats have been given three years to declare correct taxes to enjoy a waiver on penalties.
DIGITAL: Online transactions to now attract a 1.5 percent digital tax as govt goes after growing e-commerce in the country.
DEBT: “Our debt remains sustainable, despite some of the debt burden indicators deteriorating due to the impact of the Covid-19 pandemic which has elevated expenditure pressure,” CS Ukur Yatani said.
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