Keeping to Kenya's brand of African Socialism, the budget presented to the Nairobi Parliament on Thursday (17 June) by Finance Minister Mwai Kibaki was one which imposed higher levies on the rich.
Keeping to Kenya's brand of African Socialism, the budget presented to the Nairobi Parliament on Thursday (17 June) by Finance Minister Mwai Kibaki was one which imposed higher levies on the rich. Taxes on those in the lowest income brackets remained unchanged.
The new budget asks for a 12 1/2 percent tax on repatriated dividends and interest and a twenty percent tax on management fees and royalties paid to non residents.
Some non income-based taxes also were proposed for immediate increase. Mr Kibaki asked for a 10 percent levy on beer, spirits, tobacco, cigarettes and hotel bills.
Object of the increases, said Mr Kibaki, was raise 11.5 million sterling to balance the recurrent account.
SYNOPSIS: Thursday was budget day in East Africa and in Nairobi the news of the latest tax changes was brought to Parliament by Mwai Kibaki Kenya's Finance Minister.
Budget day brings out the dignitaries such as Vice President Arap Moi and Sir Eric Norris, The British High Commissioner. It is also a day for politics as Kibaki confers with the Assistant Minister for Health (Mohammed Jahazi).
The proceedings began in earnest with the arrival of President Jomo Kenyatta. His government needs 11.5 million sterling to balance the recurrent fund.
The budget proposes an immediate increase of 10 percent on so-called luxury items such as bee, spirits, accommodation.
Banking establishments will be hard hit by Kibaki's budget. It calls for 12 and a half percent increase on repatriated dividends and interest and a twenty percent duty on management fees and royalty payments to non-residents.
But for the man in the streets, the budget is a reaffirmation of the financial stability of the government. The cost of his cigarettes may be going up, but his pay packet will not be greatly effected.