Premium

Treasury CS Ukur Yatani goes big on ‘sin’ taxes

Treasury CS Ukur Yatani at the Parliament buildings, Nairobi to present his final 2022/23 budget on April 7,2022 [Elvis Ogina, Standard]

Treasury Cabinet Secretary Ukur Yatani is proposing to raise taxes on various services and products, including alcohol and cigarettes, to raise at least Sh2.16 trillion to support the Sh3.31 trillion budget.

Mr Yatani hopes the fresh tax measures targeting alcohol, gambling, gaming, cigarettes and derivatives will add at least Sh50.2 billion to tax revenues and take the total ordinary revenue collections to Sh2.16 trillion.

Treasury expects taxes on income, profits and capital gains to hit Sh997.34 billion split between individuals (Sh512.7 billion) and companies (Sh484.64 billion).

Taxes on goods and services have been put at Sh1.05 trillion compared with Sh915 billion expected in the year ending June.

The Sh1.05 trillion will be raised from sources such as general taxes on goods and services (Sh593.9 billion), value added tax (Sh584.67 billion) and excise duty (Sh300.96 billion).

A further Sh215.09 billion is expected from international trade and transactions, up from Sh193 billion.  

Treasury expects grants to amount to Sh33.3 billion, a nearly halving from Sh66.3 billion that is expected in the current financial year. Receipts from sale of assets are being projected at Sh20.1 billion.

Mr Yatani gave hints on the several products and services that will be slapped with additional taxes, with the exact picture expected in the Finance Bill 2022—a document that will offer details of all revenue-raisin measures for the 2022/2023 financial year.

For instance, companies seeking to advertise alcohol, gambling and gaming are staring at increased costs with Treasury seeking to introduce 15 per cent duty on fees charged by TVs, newspapers, billboards and radios for advertisement of these activities.

E-cigarettes and related products will see increased taxes, with Yatani proposing to change the taxation regime for liquid nicotine from the current shillings per unit to an excise duty of Sh70 per milliliter.

Mr Yatani did not mention other products that have been hit with additional taxes of up to 10 per cent excise duty, with details expected in the Finance Bill 2022. “In the Bill, I have also proposed to increase the specific rates of excise duty for a number of products by 10 per cent to generate additional revenue for the Government,” he said.

The budget contains a deficit of Sh862 billion that Treasury expects to finance through debt.

Some Sh280 billion will be borrowed from external market while Sh581 billion will be from the domestic market, to take the stock of public debt beyond the current Sh8.21 trillion.

Business
Premium Burdened Kenyans walk into Easter weekend broke
Business
Premium Looming crisis as top lenders stare at Sh500b in bad loans
Business
Premium Water PS Korir put on the spot over Sh14m dam land
Business
Premium Ruto's food security hopes facing storm amid fake fertiliser scam