Treasury Cabinet Secretary Ukur Yatani yesterday presented Sh.3.6 trillion budget that aims to recover the economy that was affected by Covid-19 pandemic.
The Health sector leads in Yatani’s list of winners as he proposed Value Added Tax exemptions in Covid-19 related medical supplies.
This items includes; inputs used in the manufacture of medical ventilations and breathing appliances.
“It is my hope that the suppliers of these medicament and 93 medical equipment will reciprocate by making their prices affordable,” Yatani said.
Additionally, Yatani proposed VAT exemption on inputs used in the manufacture of medical ventilations and breathing appliances to enhance access to these products especially in the management of Covid-19 complications.
“I propose VAT exemption in medicaments used in medical facilities including decongestants and food supplements,” he outlined.
Treasury also offered tax relief to National Health Insurance Fund(NHIF) contributors at the rate of 15 per cent of the contributed amount.
Importers of iron and steel will also mark gains from the budget after import duty on finished iron and steel products are retained at 25 per cent.
Internet suppliers have also derived benefits from the budget.
“Suppliers of internet data services bought in bulk for resale to get excise duty refund,” Yatani said.
Diaper manufactures get an input at 0 per cent under Duty Remission Scheme.
However, bread has shifted from being 0 rated to standard denying bakers the opportunity to claim input VAT forcing them to increase price.
Nevertheless, motorcyles price will increase as the excise duty on imported motorcycles is set to transition from a flat rate of Ksh.11,608.23 to a rate of 15 per cent.
“The removal of this tax generated a lot of public debate considering that betting has become widespread in our society resulting in negative social effects,” Yatani noted.
Betting sector once again falls victim after Treasury reintroduced excise duty on betting at the rate of 20 per cent of the amount wagered.
Similarly, gas to attract 16 per cent VAT making LPG to be costlier by about Sh.160 for 6kg cylinder.
Other commodities targeted for excise duty include jewellery and locally manufactured sugar confectionery.
Other area targeted for taxation are resident sub-contractors in the mining and petroleum sector to pay 10 per cent withholding tax on service fees.
Earnings from fees and commissions on loans by commercial banks have also been targeted for taxation.