- According to Treasury proposals, petroleum products are now to be exempt from excise duty hikes based on inflation adjustments.
- This means that the rate of excise duty for petrol, diesel and kerosene will now remain flat over coming years.
- Inputs and raw materials used in the manufacture of passenger motor vehicles are to be exempted from VAT.
The 2022 Budget statement has brought out clear winners and losers as the government hands over incentives to some players in the economy while others take the hit primarily off new tax proposals.
The winners of this year’s budget are mostly made up of players aligning to the government’s agenda and priority spending areas across the next fiscal year which commences on July 1.
Those hit in the spending estimates and revenue-raising measures highlights meanwhile largely composed of segments expected to yield Ksh.50.4 billion in new tax revenues.
The winners
First in the W (win) column are all Kenyans who comprise users of petroleum products.
According to Treasury proposals, petroleum products are now to be exempt from excise duty hikes based on inflation adjustments.
This means that the rate of excise duty for petrol, diesel and kerosene will now remain flat over the coming years.
Next on the list of winners are local manufacturers- with specifics to the local assemblers of passenger vehicles.
Inputs and raw materials used in the manufacture of passenger motor vehicles are to be exempted from VAT.
At the same time, the locally manufactured passenger motor vehicles are now to be exempt from the payment of excise duty.
Sponsors, ideally companies donating to charitable organisations are also big winners of the budget with the National Treasury proposing to allow entities not registered as Societies or NGOs to deduct their donations from taxable income.
Other big winners emerging from the budget cover industries behind plants and machinery for use by manufacturers of pharmaceutical products who will be exempt from VAT, supplies of medical oxygen who are also exempt from VAT and importers of eggs used for the purposes of hatching who will be off the hook on excise duty.
Losers
Broadly, the sin industry is once against the biggest loser from yet another budget statement.
Firstly, advertisement fees for the gaming and alcohol industry will now attract a 15 per cent excise duty.
This, the Treasury says, is in a move to tackle gambling, gaming and alcohol addiction.
Next in line will be the producers and users of liquid nicotine. The products are now set to attract Ksh.70 in excise duty per millilitre from the previous one shilling.
Boda boda riders are meanwhile part of the losers this year with the Treasury proposing changes to the Insurance Act to oblige the owners of motorcycles and tuk-tuks operating as PSVs to take third party covers to protect their client.
The proposal has been attributed to rising road accidents and fatalities involving the operators.
Other losers rounding off the budget statement include taxpayers involved in tax disputes with the Kenya Revenue Authority (KRA), soon to be Kenya Revenue Services.
Such taxpayers will be required to deposit 50 per cent of the disputed tax revenue in a special account at the CBK when the Tax Appeals Tribunal (TAT) makes a ruling in favour of KRA even if the taxpayer appeals such a decision.
The amount is however to be reimbursed should such a taxpayer win the appeal.
