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Treasury signals tax exemptions for health sector in Kshs. 3.6T budget

Byadmin

May 6, 2021

The National Treasury and Planning is proposing to introduce Value Added Tax (VAT) exemptions on some of the critical medical equipment and supplies in order to support efforts to secure the country’s health sector and create job opportunities for the youth.

In a the 2021/22 and Medium Term Budget alongside the Finance Bill 2021 presented to Parliament for consideration, the National Treasury Cabinet Secretary Ukur Yatani said the Kshs. 3.632 trillion budget will focus of COVID-19 recovery and the Big Four Agenda which include food security, affordable housing, manufacturing, and affordable healthcare for all.

The budget which is Kshs. 840 billion more than the current budget is expected to help Treasury navigate its spending plans in a sea of challenges which include revenue shortfalls, debt pressure and a health pandemic to worry about.

In a statement to newsrooms, CS Yatani says the budget proposes to strike a balance between stimulating economic recovery and responding to the health challenges of the COVID-19 pandemic.

“In preparing the estimates we have been very alive to the current challenges of the ongoing pandemic, while ensuring that we continue on a steady path of economic recovery, by investing KES 26.6 billion on the Post COVID-19 Economic Stimulus Programme (PC-ESP) and KES 135.3 billion on the President’s Big Four Agenda covering universal healthcare, food and nutrition, manufacturing and affordable housing”, noted Yatani.

Under the proposed 2021/22 spending plans, the Executive will be allocated Kshs. 1.879 trillion, Parliament Kshs. 37 billion and Judiciary Kshs. 17 billion as contained in the 2021 Budget Policy Statement (2021 BPS) approved by Parliament earlier this year.

The Finance Bill 2021 on its part, seeks to amend the Income Tax, the VAT Act, the Excise Duty Act, the Tax Procedures Act, the Miscellaneous Fees and Levies Act, as well as the Capital Markets Act, the Central Depositories Act, the Kenya Revenue Authority Act, the Insurance Act and the Retirement Benefits Act, to facilitate realisation of the budget proposals.

“We are proposing to introduce VAT exemptions on ventilators, decongestants and supplements in order to boost the health sector by lowering costs, while also supporting youth employment by proposing tax deductions for employers that engage Technical and Vocational Education and Training (TVET) graduates as apprentices. We are also proposing several amendments to enhance tax administration and dispute resolution operations. These proposals alongside others contained in the Finance Bill will help create the legal and policy framework to achieve our medium-term budget goals,” said Yatani

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