KENYA: Kenya targets the rich to shore up revenues in 2013/14 budget

Record ID: 362646

  • Title: KENYA: Kenya targets the rich to shore up revenues in 2013/14 budget
  • Date: 13th June 2013
  • Summary: NAIROBI, KENYA (JUNE 13, 2013) (REUTERS) EXTERIOR OF PARLIAMENT BUILDINGS
  • Embargoed: 28th June 2013 13:00
  • Keywords:
  • Location: Kenya
  • Country: Kenya
  • Topics: Economy,Politics
  • Reuters ID: LVAAK2398CUNJ53UJB0SUW7DBS5C
  • Story Text: Kenya will look at ways to impose a capital tax gains as it seeks to shore up revenues in the face of ever-growing demands for cash to fund an expanded government and development projects, its minister of finance said on Thursday (June 13).
    President Uhuru Kenyatta, who took up the helm of the east African nation in April, has vowed to lift 10 million people out of poverty and to support a new devolved system of government that created 47 new local government units.
    Many Kenyans were hopeful that the budget would make clear statements on the creation of employment and reduction of poverty as promised by Kenyatta, who entered office this year.
    "What we want to see the promises which were were said, to be met... that is what I can say, but there is a lot to be heard from the minister," said Stanclus, a hotelier.
    "They should invest a lot in the youth, so that we can get jobs. Many young people are jobless and we need jobs so they should create more jobs," said Anthony Juma, an unemployed youth.
    Henry Rotich, the cabinet secretary for the national Treasury said the government has initiated a review of the capital gains tax to formulate ways for its effective enforcement.
    "On the domestic front our economy remains resilient growing at 4.6 percent in 2012 up from 4.4 percent in 2011. Despite this outcome low productivity in agriculture, weak manufacturing sector and weak transport system in the face of rising imports and stagnating exports remain a major concern. Honourable members, the 2013 budget policy statement tabled in this house in January and updated in April to reflect the development priorities of the new administration provides details of the growth, the government growth projections for this year and over the medium term. Our growth expectation in 2013 is now 5.8 percent rising to over 7 percent in the medium term," said Rotich.
    In the budget, the minister set the fiscal deficit at 7.9 percent of the gross domestic product or 329.7 billion shillings ($3.86 billion), slightly higher than markets expected.
    He said the gap would be filled by net foreign financing of 223 billion shillings and 106.7 billion net borrowing from the domestic market.
    Analysts said the deficit was on the high side of expectations.
    "Inflation has declined consistently over the past one year and is expected to remain around 5-7 percent target over the period ahead. Interest rates and exchange rates are fairly stable and we expect this stability to continue going forward with appropriate macro economic policies," said Rotich.
    Kenya's inflation rate fell to 4.05 percent in the year to May.
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