- President William Ruto's administration has dangled a raft of incentives in his Sh3.5 trillion budget to reduce the high cost of living.
- This means that poor households, tea farmers and fishermen will enjoy an array of benefits despite the soaring commodity costs.
Image: FILE
President William Ruto's administration has dangled a raft of incentives in his Sh3.5 trillion budget to reduce the high cost of living.
This means that poor households, tea farmers and fishermen will enjoy an array of benefits despite the soaring commodity costs.
In the 2023/24 financial year budget, Ruto's government has gone flat out with a total of Sh267.7 billion to fund nine value chains critical in the reduction of high costs.
They include interventions in dairy, rice, construction and minerals, which anchor his bottom-up economic transformation agenda.
In a big win for households as promised during the campaigns, the government has proposed to exempt liquefied petroleum gas (LPG) from VAT.
The move will see the cost of cooking gas fall significantly as Ruto pushes for a clean-energy cooking regime.
Currently, 6kg cylinders are refilled for between Sh1,250 and Sh1,440.
The 13kg cylinders are refilled for between Sh2,700 and Sh3,100.
Ruto last month pledged to slash prices by more than half at the start of the 2023/24 financial year through various tax incentives.
On Thursday, the Cabinet approved the Finance Bill for the 2023/24 financial year after a special meeting chaired by President William Ruto.
The President's economic mandarins had finalised plans for his administration’s inaugural budget expected to be unveiled in June.
The proposed amendments have been forwarded to Parliament for approval.
In a big win for farmers, tea purchased from local factories and the auction centre in Mombasa will also be exempt from VAT.
The National Treasury will also attempt to extend such incentives to companies producing packaging materials.
This will be in the hope that the move further lowers the cost of locally produced tea.
And in a move to grow the local fishing industry, excise duty will be charged on imported fish.
Locals have been complaining about the proliferation of cheap fish from China.
The move comes barely five months after Kenya struck a deal that will see the Republic of Hungary complete a Sh2.5 billion project to increase fingerling production.
The government will put up a Nile Perch multiplication centre and a fishing school on the shores of Lake Victoria.
Pharmaceutical companies will also join the list of beneficiaries in the proposed tax regime.
Tax incentives will be extended to firms that produce vaccines and other biopharmaceutical products.
America’s Moderna Inc could be the first major beneficiary as it last month signed a deal with Kenya to set up a $500 million (Sh67.9 billion) vaccine facility in Nairobi.
The facility is expected to produce up to 500 million vaccine doses each year.
Treasury CS Prof Njuguna Ndung’u is expected to present the proposed amendments to the Finance Bill in his budget speech for the 2023/24 financial year.
In the next financial year, the government will pump Sh267.7 billion into nine sectors expected to boost various value chains.
The clothing, edible oil, dairy products, leather, rice, tea, fisheries, minerals and construction sectors will get a slice of the Sh267.7 billion cake.
The nine sectors are expected to create jobs and lower the cost of living while widening the tax bracket in line with Ruto’s Bottom-Up campaign pledge.