At a glance: East African budgets

By Independent team

Kenya

Budget read by Uhuru Muigai Kenyatta, deputy prime minister and minister for Finance of Kenya.

Theme: overcoming today’s challenges for a better Kenya tomorrow

Economy expected to grow by 3% in 2009/2010.

Total revenue target for fiscal year 2009/10 is Kshs.569.6 billion (or 22.4% of GDP)

Gross Recurrent Expenditure for 2009/10 is estimated at Kshs.606.7 billion.

Objective of the 2009 budget: stimulate growth and protect jobs, reduce poverty, enhance food security and protect the poor.

Bring inflation down to the 5%.

Government waste

Budget for 2009/2010 will be expansionary but with ministerial reductions: 80% on furniture and fittings; 60% on advertisement and publicity; 40% on telephone expenses; 20%on hospitality supplies and services; 10% on domestic and foreign travel and subsistence.

Moratorium on purchase of new motor vehicles, except for security purposes.

Introduce use of fuel cards for government vehicles.

Entitled officers, including cabinet ministers be allowed only one vehicle whose engine capacity should not exceed 1,800 cc.

Comprehensive audit of the payrolls.

Infrastructure

Introduce electronic project monitoring information system (e-promis) be open to the public to enable wananchi to monitor the performance of projects of their interest.

Kshs.140 billion for infrastructure spending i.e. Roads, rail, ports, broadband and energy.

Positioning the port of Mombasa as regional service hub.

Kenya, Uganda, to construct a new standard gauge railway line from Mombasa to western Kenya and to Kampala. Kshs. 3 billion for it.

ICT: mobile computer laboratories for each constituency for use by high schools.

Launch a one million laptop/computer campaign countrywide.

Each constituency will receive on average Kshs. 90 million to finance its various development projects plus Kshs.105 million per constituency as conditional economic stimulus or resilience package toward financing infrastructure development covering education and healthcare, and other development projects. Kshs 10 million per constituency for the construction of fresh-produce and wholesale markets. Kshs. 500 million to youth development fund and another Kshs. 500 million to boost the women enterprise fund kitty in order to extend credit for business start-up and expansion.

Kshs. 2.2 billion to support the resettlement of IDPs.

Kshs 800 million to Kenya Tourist Development Corporation (KTDC); another Kshs 400 million for tourism marketing.

Kshs.1 billion each to free primary and free secondary tuition.

Kshs 353 million or about Kshs 2 million per constituency to recruit additional 2,100 secondary school teachers on contract terms, or 10 teachers per constituency as a first step.

Taxation

Established a tax harmonization taskforce

Remove the sugar development levy on imported refined industrial sugar.

Exemption of import duty on all industrial spare parts.

Remit all import duty on raw materials for the manufacture of sanitary towels.

Remission of duty on inputs for use by paper and paperboard mills.

Remove import duty on asbestos fibres used in the manufacture of brake linings and pads.

Reduce import duty on all synthetic yarns

Zero rate VAT on locally produced and ginned cotton.

Exemption of import duty on all four wheel drive motor vehicles specially designed and built for tourist purposes.

Remove the current import duty and VAT on television cameras, digital cameras and video camera recorders.

Zero rate for VAT taxable goods and services offered to film producers.

One hundred per cent investment deduction on capital expenditure incurred by a film producer on purchase of any filming equipment.

Tax deduction of 5% on computer software.

Exempt from VAT, all telephones, for 23 cellular networks or other wireless networks.

Agricultural sector

Raise import duty rate on wheat from 10% or 50 US$ whichever is higher to a rate of 25%.

Exempt import duty and to zero rate for VAT, heat insulated milk tanks.

Zero rate for VAT taxable supplies for the construction of grain silos.

Zero rate for VAT, refrigerated trucks and parts for agricultural, horticultural and forestry machinery.

Pro poor

Reduce import duty on second hand clothing (mitumba) from US$ 0.3 per kg or 45% whichever is higher to US$ 0.20 per kg or 35% whichever is higher.

Zero rate bicycles

Reduce excise duty on cosmetics and skin care products from 10% to 5%.

Remove excise duty on jewellery products.

Reduce excise duty on water from 10% to 5%, and that on carbonated soft drinks and juices from 10% to 7%.

Excise duty on spirit from Kshs 7/= per 1% of alcohol per litre to Kshs 120 or 65% whichever is higher, and that of wines from Kshs 7/= per 1% of alcohol per litre to Kshs 70 or 50% whichever is higher.

Banking

Amend the banking act to allow for branchless banking.

Amend the penal code to outlaw the operations of pyramid schemes.

Amend the capital markets regulations to increase the share capital for stockbrokers and investment banks from Kshs.5 million and Kshs.30 million to Kshs.50 million and Kshs.250 million respectively.

To amend the retirement benefits act to require that new investments by pension schemes that receive statutory contributions be put in government securities and infrastructure bonds issued by public institutions only.

Issue new generation logbook which is issued electronically and has

More security features.

Introduce spot fines.

Rwanda

Presented by Finance minister James Musoni

Rwanda aligning budget calendar to that of the East African Community for first time.

Real growth rate in 2008/9 was 11.2%.

Agriculture grew by 15%.

Rwanda Franc remained stable against the US dollar depreciating slightly by about 2% during the year 2008.

Priorities

Physical infrastructure e.g. Energy generation and distribution, road construction and rehabilitation, and ICT development.

Development of the productive sector with emphasis on the agriculture supply, agri-business, land reform and promotion of value addition for exports.

Manufacturing and financial services. The total budget set aside is Rwf 87.9 bn.

Human development and social sectors.

Good governance.

Revenues and expenditures

Government expenditure in 2009/10 is Rwf 838 billion (US$ 1,452,843,273). 24% higher than the 2008 budget.

External financing of the 2009/10 budget increases by 18% compared to the 2008 budget.

External grants increase by 11% compared to the 2008 external grants while external loans increase by 65%.

Taxation

Customs tariff band will change from 4 tariff bands to 3 tariff bands with the highest tariff rate of 25% for finished products, 10% for intermediate goods and 0% for raw materials.

Revenue loss in the short-term of about 15.9 million euro or Rwf 12.2 billion.

Exemption of import duty on four wheel drive vehicles specially designed and built for tourist purposes under the exemption regime.

Remission of Common External Tariff (CET) on wheat grain at 0% for rwanda for a period of one year.

Exemption of import duty on industrial spare parts.

Exemption of duty on equipment and inputs excluding motor vehicles imported by a licensed company for direct and exclusive use in oil, gas or geothermal exploration, and development.

Exemption of heat insulated milk tanks for dairy industry.

Reduce CET rate for asbestos fibres from 25% to 0%.

Reduce import duty rate for yarn from 10% to 0%.

Stay application of CET of 75% on rice and apply a duty rate of 30% for a period of two years.

Review the import duty rate from 25% to 0% on television cameras, digital cameras and video camera recorders. This is to promote film industry in the region by providing job opportunities to the youth.

Grant remission of import duty from 25% and apply 10% for trucks of carrying capacity of 5 tonnes and above for one year for Uganda, Tanzania and Rwanda; grant remission of import duty on trucks of carrying capacity of over 20 tonnes from 25% and apply 0% for Uganda, Tanzania and Rwanda for one year.

The CET for kerosene stove to be reduced from 25% to 10%.

Ban exportation of scrap aluminium, steel and copper wires and cables. Increase the excise duty on airtime from 3% to 5%.

Allocations

Infrastructure

Total allocation is Rwf 190.5 billion for transport and communication, water and sanitation, fuel and energy, land housing and community.

Water and sanitation

The total allocation to this sector is Rwf 19.1 bn.

Energy

The total allocation to this sector is Rwf 62.9 bn.

Land housing and community amenities

The total allocation to this sector is Rwf 4.8 bn. The key activities to be implemented under this sector include:

Productive capacities

The total budget allocation is Rwf 87.9 bn. This budget is distributed to sectors of environmental protection, agriculture and industry as well as commerce.

Industry and commerce

The total allocation to this sector is Rwf 21.1 bn.

Human development and social sectors

The total budget allocation in 2009/10 fiscal year to this cluster is Rwf 270.4 bn. This budget is distributed to sectors of youth, culture and sports, health, education and social protection.

Governance and sovereignty

The total budget allocation in 2009/10 fiscal year is Rwf 289.2 bn. This budget mainly is distributed to sectors of general public service, defense and public order and safety.

Tanzania

Presented by Finance Minister Mustafa Mkulo

Government to spend Tzshs 9.51 trillion.

Donors contribution Tzshs 3.182 trillion.

Government will collect Tzshs 5.1 trillion up from Tzshs 4.3 trillion.

Budget 33.4% externally financed.

Taxation

Abolish excise duty exemption granted to mining companies.

Reduce the VAT from 20% to 18%.

Get Tzshs15 billion from the sale of its 21 percent stake in national microfinance bank.

Lower corporate income tax to 25% from 30% for listed companies on the Dar es salaam stock exchange that have issued at least 30% of share capital.

Exempt import duty on 4×4 vehicles for tourism.

Scrape import duty on equipment used in the exploration and development of oil, gas, geothermal or gas.

Exempt import duty on industrial spare parts.

Remove a 10% duty on pharmaceuticals and apply zero duty under a regional CET.

Reduce duty on used clothing from 45% or US$0.30 cents per kg to 35% or US$.20 per kg, whichever is higher.

Increase import duty on yoghurt and other buttermilk from 25% to 60%.

Remove duty on synthetic yarn.

Increase excise duty on carbonated soft drinks, alcohol and cigarettes.

Impose excise duty on mining companies.

Exempt VAT on farm services for land preparation, cultivation and harvesting.

Abolish VAT exemption on locally processed grown tea and coffee.

Limit VAT special relief given to mining companies to only cover prospecting and exploration.