TAX EMERGING ISSUES WORKSHOP The Big four agenda Presentation by: CPA Faustin Mwinzi Friday 12 October 2018 Gelian Hotel Machakos Uphold public interest
Big four
Allocations
Initiatives Manufacturing Objective- increase contribution to GDP to 15% by 2022 Currently -2013-2017 9%
Manufacturing Initiatives infrastruc ture Legislatio n Finance incentives Value addition
Universal health care Objective- 100% UHC under NHIF by 2022 currently @36%
Initiatives 1 Enlist 100,000 voluntary health 2 3 Expand Linda mama Align NHIF act to UHC 4 Digitize NHIF infor
Food security Objective: Provide food security to all and improve nutrition Current state 47% family income spend on food - 1 in every 3 kenyan s suffer chronic food insecurity and poor nutrition annually. In addition, about 30% of the children countrywide are stunted, 13% moderately wasted, while 7% are moderately underweight.
Food- Initiatives Enhance large scale production Increase smallholder productivity Reduce cost of food
Housing Objective provide 1million affordable and decent houses by 2022 Current state- housing deficit 150,000 houses annually,
Housing Initiatives Provide incentives for low cost housing Establish Housing fund Establish Mortgage finance company Review legislation for sustainability
Opportunities
Oppurtunities- food 700,000 new acres of maize, potato, and rice cultivated under PPPs more use of locally blended fertilizer, waivers of duty for cereal-drying equipment, bags, and fishing equipment.
Food Cont train 1,000 SMEs in food processing contract farmers will supply the strategic food reserve subsidy model for farmers will see investments in post-harvest loss reduction, early warning systems, rehabilitation of fish landing sites on Lake Victoria elimination of multiple levies along the value
Opportunities - housing raising low-cost funds from the public and private sectors. creation 350,000 jobs, and provide a market for manufacturers and suppliers. Mortgage Refinancing Company will issue bonds issue long term funds for mortgages to FIs PPP land swaps,
Housing Cont centralised housing for police and prisons Housing fund, reduced tax rates for developers who construct 100 houses a year. pilot scheme at Mavoko for construction of 8,200 houses
Opportunities - Manufacturing modern industrial park in Naivasha, apparel industrial sheds in Athi River, Dongo Kundu (SEZ) rollout of genetically modified cotton. complete the Machakos leather park stop imports of finished leather products identify three other industrial parks along the SGR
Manufacturing Cont accelerate the export of agroprocessed "buy Kenya" policy that targets 70 per cent of housing material. assemble phones, TV's and laptops, IT entrepreneurs programme to create 10,000 jobs support for 10,000 SMEs to reach export standards
Opportunities - Health spending will go from Sh61 billion in 2018 to Sh73 billion in 2021 extend NHIF services through 37,000 bank agents. The Linda Mama to missionary and private hospitals CT scan capability in all counties.
Tax incentives aligned to Big 4 VAT Extension of exemption of equipment used in grain storage facilities Exemption on raw materials for animal feeds VAT exemption on parts for the assembly of computers
Tax Incentives- customs boost to local industry higher duty on plywood, block boards MDF, Metal industry- increase on duty from 25% to 35% on Iron and steel products Textile- USD 5 per kilo of clothes or advalorem @ 35% and USD 10 per pair of shoe or 35%
Customs cont Customs duty reduction from10% to 0% on polyvinyl alcohol, a raw material used in the textile fabrication a specific import duty rate of USD 500/MT or 35%, whichever is higher, for imported vegetable oils
Income tax incentives developers of +100 housing units tax @ 15% Local Motor Vehicle assemblers taxed at 15% for 5yrs and extended by another 5yrs if local ex factory cost is more than 50% Electricity Bills- additional 30% claim
Income tax incentives Electricity Bills- additional 30% claim VAT exemption
Income tax incentives Special economic zones Exemption from Value-added tax. Corporate tax rate at the rate of 10 % for the first ten years and 15 % for the next ten years. Normal 150 % ID Exemption from duties and taxes EACM act 2005and subsequent amendments. WHT on div to non resident @ 5%
Funding the Big Budget National Housing development fund 1.5% of salary for employers and employees subject to a max of Shs 5000 PM Betting Winnings to be taxed at 20% but Reduction of lotteries, betting and gaming taxes from 35% to 15%
Funding the Big Budget National Housing development fund 1.5% of salary for employers and employees subject to a max of Shs 5000 PM Betting Winnings to be taxed at 20% but Reduction of lotteries, betting and gaming taxes from 35% to 15%
Funding - Presumptive tax at 5% of license fee for persons with turnover less than 5m
Funding excise Kerosene Sh18 for every litre of kerosene. Motor Vehicle Excise Duty of between 20% and 30% Sugar confectioneries including white chocolate at Sh 20 per kg. Sweets, chewing gums, juices and chocolates and other confectionaries Sh20 per kilo.
Funding excise Telephone and internet data services excise duty at 15% of excisable value (up from current 10%). Money transfer services fees Excise duty at 20% of excisable value (up from current 10%); Other fees charged by financial institutions at 20% of excisable value (up from 10%)
Finally