Over 59 million Kenyans are eagerly waiting to hear the budget statement, which is due to be presented to the National Assembly on Thursday afternoon at around 3 or 2 p.m. CAT.
Finance Minister Ukur Yatani is currently preparing to appear in the National Assembly and deliver his budget declaration for 2021/2022.
According to local experts who have been monitoring the Kenyan economy over the years, this will be the first time the budget will be presented ahead of the 2021 economic survey of the Kenyan National Bureau of Statistics (KNBS), which is traditionally a picture of the previous year.
According to the process, after reflecting on the state of the Kenyan economy in the new fiscal year starting July 1st, Yatani will highlight priority spending areas.
According to insider information, unlike the budget days of previous years, the 2021 budget is as good as complete, as the state treasury shares both its final budget estimates and the financial draft, which includes new tax proposals.
An insight into new taxes
In another first in years, the National Treasury has not proposed any new income taxes under the Finance Act 2021.
Nonetheless, Kenyans are not spared higher taxes as the government strives to meet growing spending plans.
For example, the tax status of bread will be changed from zero to an exemption from effectively increasing costs for the basic consumer good.
At the same time, the cost of importing motorcycles, popularly known as bodaboda, will skyrocket as the Ministry of Finance proposes an adjustment of the excise tax on imports from a flat rate of Ksh 11,608.23 to a rate of 15 percent.
At the same time, an excise tax of 10 percent or 5000 Ksh per kilogram is levied on jewelry and alternative tobacco products such as nicotine bags.
Players will also be affected as the 20 percent excise tax comes back on amounts refunded after it was temporarily removed last year.
In addition to taxes, other proposals in the Finance Act aim to empower the Kenyan Revenue Service (KRA) to better recover, including an extended deadline to review taxpayer records of up to seven years from the current five.
In addition, the remuneration of whistleblowers in tax matters is increased to a maximum of 5 million Ksh, while the KRA is allowed to commission third parties to collect the tax for digital services.
Both the budget estimates and the proposals in the finance law will be examined by the National Assembly, with the House starting deliberations on the two main political declarations on Wednesday.
The two directives form the basis of the Budget Act and the Finance Act 2021, both of which require the final approval of President Uhuru Kenyatta.