Finance Act 2021 Will Hurt The Economy Than Never Before

The Kenya Association of Manufacturers (KAM) has protested the implementation of the Finance Act 2021 saying that it will hurt the already-tattered Kenyan economy that has been hit hard by the sweeping Covid-19 pandemic.

The Association has faulted the introduction of 10 percent excise tax on articles of plastics, 10 percent tax on imported resins, 10 percent tax on super absorbent polymer (SAP) used in the manufacture of baby diapers.

“The Finance Act 2021 was not subjected to public participation. The introduced regulations have a far-reaching debilitating impact on key sectors of the industry. The excise tax on various raw materials will increase the cost of manufacturing,” said KAM.

The Act also introduced 200 shillings tax per kilogram on locally-produced chocolate, 20 percent tax on fertilized eggs for incubation, 16 percent VAT on the supply of LPG including propane, and taxes on timber products.

The Act also provided limit interest to be deducted to a maximum of 30 percent of Earnings Before Interest Tax, Depreciation, and Amortization.

“The last-minute additions into a critical national document are impractical and ineffective,” said Mucai Kunyiha, the Chair of Kenya Association of Manufacturers.