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DANGEROUS PATH?

Rotich budget receives mixed reactions

Security guard says the move to tax 10 per cent of betting stakes was good as it will prohibit young people from betting

In Summary

• Measures to cut the public wage bill welcomed

• Excise duty opposed

Treasury CS Henry Rotich displays the budget before heading to parliament
Treasury CS Henry Rotich displays the budget before heading to parliament
Image: ENOS TECHE

National Treasury CS Henry Rotich’s 2019-20 budget elicited mixed reactions from the general public.

While manufacturers and consumer lobby groups commended the budget, the reality on the ground, especially for alcohol consumers and gamblers, was negative.

“The increased excise duty on betting will really squeeze our pockets. We will lose a lot of money on our stake and, therefore, there will be a decrease in the money we win,” Raphael, a security guard in the Westlands, said.

 

He also acknowledged that though it was a dent in his pocket, the move to tax 10 per cent of the stakes was good in the sense it would prohibit young people from betting.

Consumer Downtown Association director Japheth Ogutu told the Star the budget was generally good, saying the government had finally taken measures to cut the public wage bill, which had been a subject of debate in recent years.

Ogutu, however, said the move to increase taxes on commercial services, including cleaning, security, catering, sales and promotions, and transportation of goods, is a dangerous proposal that will burden low-income earners.

“The majority of people working in these sectors are poor Kenyans earning below Sh20,000. Increasing tax on these services means their salaries will be reduced,” he said.

Ogutu said this would result in double taxation to workers who already have to part with 16 per cent VAT on top of the monthly PAYE.

He said the move would also discourage investment and lock out small businesses offering catering services, particularly women and the youth.

With regard to the excise on wine and whiskey, Bavaria Gardens accountant Harrison Nderitu said bars will likely adopt a wait-and-see attitude before increasing costs on alcohol.

 

We will feel a slight pinch of the increased excise on alcohol and tobacco in our business, as we cannot immediately increase the prices for our customers,” he said.

Peter, a boda-boda rider, lauded the call by the Treasury CS to introduce the uptake of third-party insurance policy by boda-boda and tuk-tuk passenger transporters.

He said the insurance would be beneficial to his business. Previously, in the event they were involved in an accident, they had to cough cash from their own pockets to cater for their customers' medical bills, he said.