The Good and the Bad of the 2019/2020 Budget
Thursday afternoon, Treasury Cabinet Secretary, Henry Rotich read to Kenyans the KES 3.02T for the financial year 2019/2020. This year’s budget is 10 billion more than the previous year’s budget. The financial year sets in in the next two weeks. The National Assembly is expected to vary the estimates of the budget and appropriations.
Civil society groups had proceeded to the High Court to deter the budget reading process terming it as illegal as Parliament had not passed the Revenue Bill 2019.
The education sector has received a big chunk of the budget cake. The Education sector caters for education starting from the early childhood, university training and remuneration through the Teachers Service Commission. The sector received a total allocation of KES208.9B. The chuck will go into free secondary education, free primary education program, recruitment of teachers, infrastructure development and tuition and tool support. The amount will also go towards supporting higher education and also to the Higher Education loans Board.
A key priority for President Uhuru Kenyatta has been the big four key agendas – health, food security, housing and manufacturing. A total of KES 450.9B has been set aside for actualizing these agendas.
Revenue target is currently set at KES 2.2T while Kenya Revenue Authority (KRA) is set to collect approximately KES1.9T.
Among the big losers in this year’s financial budget is the sports industry where about KES 7.9B has been redirected to the Universal Health coverage to the counties thus catering to the elderly and severely disabled through the NHIF.
Betting farms, consumers of alcohol and cigarettes are also among the big losers after getting slapped with 10% tax on the stake for gamblers and 15% tax on alcoholic beverages and tobacco products. This is one of the ways in which the government plans to raise revenue to facilitate the budget.
The government has also introduced insurance for Bodaboda and Tuktuk operators that will cover the rider, passengers and pedestrians. Critics have raised issue on this taxation and how effective it will be. The finance bill is also discouraging the importation of motor vehicle where those with cylinder capacity exceeding 1500 will attract excise duty of 25%, this means the cars above 1500cc will cost more and as a result more money to the ex-checker.
On the winners side, manufacturers scored high after the import declaration fee on goods and raw materials went down to 1.5% from 2%. While the import declaration fee on finished goods has moved from 2% to 3.5%.
According to the Kenya Commercial Bank, it has indicated that Kenya’s debt currently stands at KES 5.4T.