Manufacturers Meet to Discuss National Budget Wins and Losses

The proposed 2019/2020 budget indicates that manufacturers are among the beneficiaries with the biggest allocations.

The government of Kenya, through the budget, has made tremendous efforts to address issues affecting the sector.

Some of these issues include unfair competition from imports, the illicit economy, and unpredictability in the policy and regulatory environment. These have been done with the objective to spur industry productivity and achieve the intended 15% GDP contribution by 2022.

Speaking at the Kenya Association Manufacturers Budget Seminar 2019, KAM CEO Ms Phyllis Wakiaga noted that the 2019/2020 budget has made noteworthy strides to support critical policies to drive the economy and improve the competitiveness of the manufacturing sector.

“The 2019/2020 Budget Statement proposes policies that are geared towards reigniting the manufacturing sector’s growth and development. The reduction of Import Development Fee (IDF) on raw materials and intermediate goods from 2 percent to 1.5 percent and increase of IDF on finished goods from 2 percent to 3.5 percent will reduce the cost of imported raw materials, thus improving the competitiveness of local manufacturers against finished imports. The increment of Railway Development Levy (RDL) for finished products from 1.5 percent to 2 percent will also cushion manufacturers against imported finished goods,” said Ms Wakiaga.

Ms Wakiaga further stated that the commitment by the National Treasury to adjust the VAT refund formula which has been a deterrent to exports to ensure full recovery of the portion of input tax relating to zero-rated supplies, will incentivize Kenya’s exports and improve liquidity for manufacturers.

Also in attendance was Mr Lawrence Lelei, Ministry of Industry, Trade and Cooperatives Representative, who noted that the government remains committed to boosting the industry’s competitiveness.

“In order to achieve rapid and inclusive economic growth and expand job opportunities, the government continues to implement prudent fiscal and monetary policies to achieve a low rate of inflation, low but sustainable interest rate and a competitive exchange rate to further improve the business climate for the private sector to thrive. The amendment of the Income Tax Act to provide for a deduction of 30 percent of the total electricity by manufacturers as rebate will reduce the cost of electricity to manufacturers by about 20 percent to make our products competitive in the region,” added Mr Lelei.

The Seminar reviewed manufacturers’ gains in the 2019/2020 National Budget Proposals and brought together industry stakeholders, economists and tax advisory experts.

KAM and Ernest and Young, East Africa also launched the Manufacturing Sector 2019/2020 Budget Newsletter, that seeks to outline the economic outlook of the National Budget proposals.

Mr Francis Kamau EY Tax Leader & Partner noted that the newsletter will provide an opportunity for manufacturers to proactively review the budget proposals and the expected impact on the manufacturing sector.

The proposed 2019/2020 budget indicates that manufacturers are among the beneficiaries with the biggest allocations.

The government of Kenya, through the budget, has made tremendous efforts to address issues affecting the sector.

Some of these issues include unfair competition from imports, the illicit economy, and unpredictability in the policy and regulatory environment. These have been done with the objective to spur industry productivity and achieve the intended 15 percent GDP contribution by 2022.

Speaking at the Kenya Association Manufacturers Budget Seminar 2019, KAM CEO Ms Phyllis Wakiaga noted that the 2019/2020 budget has made noteworthy strides to support critical policies to drive the economy and improve the competitiveness of the manufacturing sector.

“The 2019/2020 Budget Statement proposes policies that are geared towards reigniting the manufacturing sector’s growth and development. The reduction of Import Development Fee (IDF) on raw materials and intermediate goods from 2 percent to 1.5 percent and increase of IDF on finished goods from 2 percent to 3.5 percent will reduce the cost of imported raw materials, thus improving the competitiveness of local manufacturers against finished imports. The increment of Railway Development Levy (RDL) for finished products from 1.5 percent to 2 percent will also cushion manufacturers against imported finished goods,” said Ms Wakiaga.

Ms Wakiaga further stated that the commitment by the National Treasury to adjust the VAT refund formula which has been a deterrent to exports to ensure full recovery of the portion of input tax relating to zero-rated supplies, will incentivize Kenya’s exports and improve liquidity for manufacturers.

READ ALSO: KAM Launches Manufacturing Priority Agenda 2019 

Also in attendance was Mr Lawrence Lelei, Ministry of Industry, Trade and Cooperatives Representative, who noted that the government remains committed to boosting the industry’s competitiveness.

“In order to achieve rapid and inclusive economic growth and expand job opportunities, the government continues to implement prudent fiscal and monetary policies to achieve a low rate of inflation, low but sustainable interest rate and a competitive exchange rate to further improve the business climate for the private sector to thrive. The amendment of the Income Tax Act to provide for a deduction of 30 percent of the total electricity by manufacturers as rebate will reduce the cost of electricity to manufacturers by about 20 percent to make our products competitive in the region,” added Mr Lelei.

The Seminar reviewed manufacturers’ gains in the 2019/2020 National Budget Proposals and brought together industry stakeholders, economists and tax advisory experts.

KAM and Ernest and Young, East Africa also launched the Manufacturing Sector 2019/2020 Budget Newsletter, that seeks to outline the economic outlook of the National Budget proposals.

Mr Francis Kamau EY Tax Leader & Partner noted that the newsletter will provide an opportunity for manufacturers to proactively review the budget proposals and the expected impact on the manufacturing sector.

The proposed 2019/2020 budget indicates that manufacturers are among the beneficiaries with the biggest allocations.

The government of Kenya, through the budget, has made tremendous efforts to address issues affecting the sector.

Some of these issues include unfair competition from imports, the illicit economy, and unpredictability in the policy and regulatory environment. These have been done with the objective to spur industry productivity and achieve the intended 15 percent GDP contribution by 2022.

Speaking at the Kenya Association Manufacturers Budget Seminar 2019, KAM CEO Ms Phyllis Wakiaga noted that the 2019/2020 budget has made noteworthy strides to support critical policies to drive the economy and improve the competitiveness of the manufacturing sector.

“The 2019/2020 Budget Statement proposes policies that are geared towards reigniting the manufacturing sector’s growth and development. The reduction of Import Development Fee (IDF) on raw materials and intermediate goods from 2 percent to 1.5 percent and increase of IDF on finished goods from 2 percent to 3.5 percent will reduce the cost of imported raw materials, thus improving the competitiveness of local manufacturers against finished imports. The increment of Railway Development Levy (RDL) for finished products from 1.5 percent to 2 percent will also cushion manufacturers against imported finished goods,” said Ms Wakiaga.

Ms Wakiaga further stated that the commitment by the National Treasury to adjust the VAT refund formula which has been a deterrent to exports to ensure full recovery of the portion of input tax relating to zero-rated supplies, will incentivize Kenya’s exports and improve liquidity for manufacturers.

Also in attendance was Mr Lawrence Lelei, Ministry of Industry, Trade and Cooperatives Representative, who noted that the government remains committed to boosting the industry’s competitiveness.

“In order to achieve rapid and inclusive economic growth and expand job opportunities, the government continues to implement prudent fiscal and monetary policies to achieve a low rate of inflation, low but sustainable interest rate and a competitive exchange rate to further improve the business climate for the private sector to thrive. The amendment of the Income Tax Act to provide for a deduction of 30 percent of the total electricity by manufacturers as rebate will reduce the cost of electricity to manufacturers by about 20 percent to make our products competitive in the region,” added Mr Lelei.

The Seminar reviewed manufacturers’ gains in the 2019/2020 National Budget Proposals and brought together industry stakeholders, economists and tax advisory experts.

KAM and Ernest and Young, East Africa also launched the Manufacturing Sector 2019/2020 Budget Newsletter, that seeks to outline the economic outlook of the National Budget proposals.

Mr Francis Kamau EY Tax Leader & Partner noted that the newsletter will provide an opportunity for manufacturers to proactively review the budget proposals and the expected impact on the manufacturing sector.

READ ALSO: KAM Welcomes CBK’s Decision to Introduce New Generational Notes