BURDEN

The budget must be well thought out

More so at a time when the coronavirus pandemic has ravaged the country's economy.

In Summary
  • It proposes a blanket pension tax which will lead to lower earnings for retirees, a vulnerable group that needs cushioning.
  • It also proposes to tax overtime, bonuses and retirement benefits of low-income earners that have so far been tax exempt. 
Then Treasury CS Henry Rotich with the budget briefcase outside Treasury.
Then Treasury CS Henry Rotich with the budget briefcase outside Treasury.

The Finance Bill 2020 spells out how the government plans to fund its next budget.

To shore up dwindling revenues, it proposes a blanket pension tax which will lead to lower earnings for retirees, a vulnerable group that needs cushioning.

 

It also proposes to tax overtime, bonuses and retirement benefits of low-income earners that have so far been tax exempt.  The payments are an incentive to the majority of Kenyans in formal employment. 

Maize and wheat flour, milk and bread will be moved from the zero-rated category to tax exempt denying manufacturers credit for any payments on inputs. This will force them to raise the prices of these commodities.

VAT on cooking gas at 14 per cent defeats the clean energy push. Many will resort to charcoal, which is not only environmentally unfriendly but leads to increased forest destruction.

Taxation of Home Ownership Saving Plans beats the drive for home ownership. One equally wonders why loss-making businesses should be taxed.

Former US President Barack Obama said a budget is more than just a series of numbers on a page; it is an embodiment of our values.

The government must take a fresh look at the Finance Bill 2020, more so at a time when the coronavirus pandemic has ravaged the country's economy.

 

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