May 20, 2024

Winners And Losers in 2022 Budget

3 min read

2022 Budget of Ksh3.3 trillion budget is the largest in Kenya’s history, having grown by Ksh200 billion from the 2021/2022 Financial Year. 

The budget saw education, transport, security, and devolution sectors were given priority.

The budget’s winners are largely players who accord with the government’s strategy and priority expenditure areas for the next fiscal year, which begins on July 1.

The winners in the 2022 Budget

The Education sector received the lion’s share after it was allocated Ksh544.4 billion. This accounts for 16.48 percent of the national budget.

County governments came in second with an allocation of Ksh407.1 billion, out of which Ksh370 billion is the equity share and Ksh37.1 conditional allocations.

The Ministry of Interior was allocated Ksh317.8 billion. 

Teachers Service Commission (TSC) with Ksh294.7 billion, transport and infrastructure expansion with Ksh212.5 billion, and the Big Four Agenda with Ksh146.8 billion round out the Ksh100 billion allocation.

Affordable energy (Ksh91 billion), Parliament (Ksh50.2 billion), the Independent Electoral and Boundaries Commission (IEBC) (Ksh21.7 billion), the National Youth Service (Ksh13.1 billion), and the Higher Education Loans Board (Ksh13.1 billion) are among the other beneficiaries (Ksh6.8 billion).

Petroleum products are now to be exempt from excise duty hikes based on inflation adjustments.

This means that the rate of excise duty for petrol, diesel and kerosene will now remain flat over the coming years.

Local manufacturers- with specifics to the local assemblers of passenger vehicles; inputs and raw materials used in the manufacture of passenger motor vehicles are to be exempted from VAT.

Locally manufactured passenger motor vehicles are now to be exempt from the payment of excise duty.

Sponsors, particularly firms donating to charitable organizations, will benefit greatly from the budget, with the National Treasury proposing to allow entities that are not registered as Societies or NGOs to deduct their gifts from taxable revenue.

Industries that manufacture plants and machinery for use by pharmaceutical product manufacturers will be exempt from VAT, as will supplies of medical oxygen, and importers of eggs used for hatching will be exempt from excise duty.

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Losers in the 2022 Budget

The sin industry is the biggest loser in the 2022 budget statement.

Advertisement fees for the gaming and alcohol industry will now attract a 15 percent excise duty.

Manufacturers and consumers of liquid nicotine also face higher costs after the government increased the levy imposed on the product to Ksh70 per mililitre.

Boda boda riders are also part of the losers with the Treasury proposing changes to the Insurance Act to oblige the owners of motorcycles and tuk-tuks operating as PSVs to take third-party covers to protect their client.

The proposal has been attributed to rising road accidents and fatalities involving the operators.

Tax defaulters have also been targeted following a proposal to have them deposit 50 percent of disputed tax revenue pending the hearing and determination of the case filed by the taxman. 

The money will be deposited in a special account in the Central Bank of Kenya (CBK).

Also read,

Kenya’s Budget 2022/23 Financial year; Key highlights 

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