KENYA 2017/18 BUDGET SPEECH
The Kenya Budget Speech was read 2 months earlier than it usually is as a result of preparing for the August General Election. Kenya Cabinet Secretary for the National Treasury, Mr Henry K. Rotich has delivered the Budget Speech.
Key Highlights of the Budget Speech:
- The fiscal deficit is projected to decline to 6.0 % of GDP from an estimated 9.0 % in the FY 2016/17.
- Global growth is projected at 3.4 % in 2017 compared with an estimate of 3.1 % in 2016.
- The economy grew by 5.9 %, 6.2 % and 5.7 % in the first, second and third quarters of 2016 respectively, bringing the average growth for the first three quarters to 5.9 %. It is expected to grow by another 5.9 % in 2017.
- Revenue collection including Appropriation-in-Aid (AIA) is projected at Ksh 1,704.5 billion equivalent to 19.6 % of GDP.
- Proposed Amendments to the Income Tax Act:
Expansion of PAYE tax bands by 10% and increase in personal relief by the same rate.
With effect from 1 January 2018, the new annual PAYE bands will be as follows:
The personal relief will be increased from KES 15,360 p.a. to KES 16,896 p.a.
- The tax amnesty declaration period in relation to foreign income has been extended to 30 June 2018 from 31 December 2017. KRA will issue guidelines for taking the amnesty.
- The new Income Tax Act, expected later this year, will address other measures such as taxation of capital gains, compensating tax, taxation of pensions, taxation of the extractive industry and taxation of cross border transactions.
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