KAM decries taxes on manufacturers, says move will cripple industries
Noel Wandera @NoelWandera5
The government’s decision to reduce tax incentive for manufacturers will jeopardise financial sustainability of the sector, the Kenya Association of Manufacturers (KAM) says.
In his Budget speech on Thursday, Treasury Cabinet Secretary (CS) Ukur Yatani said the proposed measures will amount to Sh535 billion, equivalent to six per cent of the gross domestic product (GDP),
“The introduction of these measures will negatively impact the liquidity position and financial sustainability of the private sector at a time when they are struggling with the impact of the Covid-19 pandemic,” said KAM chief executive Phyllis Wakiaga.
Wakiaga also said that although the Sh3 billion allocation to micro, small and medium enterprises (MSMEs), and a further Sh712 million to the manufacturing sector was a good start, it will only guarantee for a small percentage of those in dire need of financial support to rebound, given that more than 80 per cent of private players are in the MSME sector.
on Thursday, Yatani maintained import duty on iron and steel products, and producers of paper and paper products for another year, while zero-rating inputs used in the manufacture of baby diapers.
Duty on iron and steel imports will remain at 35 per cent, while that of paper and paper products has been maintained at 25 per cent.
The manufacturing sector is a major pillar of President Uhuru Kenyatta’s Big Four agenda