Mixed reactions to Rotich’s tax and spend plan

Laban Onditi Rao, vice-chairman, Kenya National Chamber of Commerce and Industry

He expected a clear policy detailing national and county taxation to avoid double levy which he said would scare away investors. Generally, he hoped for a conducive economic environment that will boost the country’s image as a business hub in the region.

He felt the government has the capacity to formulate policies geared toward enticing investors into the country and hailed it for its focus on the upgrade of the railway line to reduce the cost of transporting freight. He, however, thinks the budget was not detailed enough, terming it general.

Rakesh Rao, CEO, Crown Paints

He expected corporate tax to fall from 30 per cent to 25 per cent to spur business growth. He said insecurity posed a threat to the business community in the country and thus expected more funding to the Ministry of Interior and Co-ordination of National Government.

Mr Rao thinks the current minimum wage is too high and that it has put pressure on many businesses. He supported the government for introducing capital gains tax saying this would help plug budget deficit without turning to external borrowing.

He, however, cautioned that the tax should not be too high to hurt property developers. Overall, he thinks the budget failed to offer enough incentives in terms of tax rebates and subsidies for businesses operated by foreigners.

Gilbert Chege, Business Development Manager

If passed by Parliament, the VAT Bill tabled by the Cabinet Secretary for the National Treasury will have Mr Chege and other Kenyans digging deeper into their pockets for basic commodities.

From his expectations, the budget has covered three quarters of the issues that he was concerned about.

With Sh67 billion set aside for the National Police Service, of which Sh4 billion will go towards purchasing equipment, Sh4.5 billion for enhanced security operations and Sh3 billion for leasing vehicles to improve police patrol and mobility, he can sleep feeling safer.

Laptops for school children, which have been at the tip of every child and parent’s tongue  were not left out of the statement. Sh53.2 billion has been allocated to roll out 1.35 million laptops to Class One pupils, development of digital content and capacity building of the teachers.

“The teachers need to be trained so as to deliver the content,” he says.

Not to be left out, Class Four to Eight pupils will be able to access computer labs being set up in schools across the country. The e-Learning and e-Teaching programme is set to translate to Sh17.4 billion annually starting from the 2013/14 financial year. But the issue of fuel prices was not addressed.

Mr Chege expected the issue of bank lending rates to be addressed. The current base rate by the six largest banks by market share is at 17 per cent while the Central Bank Rate is at 8.5 per cent.

“Banks should reduce the interest rates to make credit and micro financing facilities more accessible. People are expecting their expenditure to come down, be it for food or fuel,” he says.

With the recent wave of crime hitting residential areas in the city, he said funds should be set aside for security instruments for the law enforcers to curb crime. This will be a step in improving safety which was an election promise made by the Jubilee government.

Bernard Andabwa, Guard with Lasco Security Services 

He is married with children and lives with his family in Thindigwa, Kiambu. Mr Andabwa hoped the government would lower the cost of fuel and flour and that the cost of the commodity would drop to Sh70 after the budget- reading.

“I expected the cost of flour to come down to Sh70. But I know it may be too much to ask for. I think the price of all commodities will definitely shoot as it has been the case over the years,” Mr Andabwa said.

He spends three quarters of his salary on kerosene and transport— Sh795 on 10 litres of kerosene and between Sh3,000 and Sh3, 500 on public transport. His budget for food is Sh2, 500 per month with most of it going to buying maize flour.

“My salary is wasted on public transport. Matatu fare is my biggest burden,” said Mr Andabwa.

He earns Sh5, 500 a month which he complements by running errands for people in the course of his duty. “I make Sh200 in a day from these errands. This helps me meet some of my needs,” he adds.