TAX NEWS - June 2010

Kenya Tax: Uhuru defends tax regime

Debate on the budget policy statement entered the second day Wednesday in parliament with focus on tax proposals touching on excise duties, value added tax, income tax, miscellaneous fees and taxes.

Finance Minister Uhuru Kenyatta expressed the need to improve compliance in payment of taxes and broadening the tax base if reforms in all sectors are to be implemented in a bid to jumpstart the economy.

He defended the lowering of taxes on farm inputs saying it was meant to increase agricultural production and ensure food security that remains a major headache for the government.

The increase in taxes on non malted and malted beer reflects inflation adjustments that need to be addressed Kenyatta said.

Members of Parliament supported the motion calling for the prompt release of funds by treasury and utilization of the funds as stipulated for any significant economic growth to be realized.

They however decried the slashing of funding to the tourism ministry saying it was crucial in bringing in the much needed foreign currency while creating employment for thousands of Kenyans.

The MPS urged the government to urgenmtly address the plight of IDP's who are still languishing in IDP camps.

They noted that though the government was keen on implementing the economic stimulus package it must be ready to learn from the mistakes in the previous budgets where the major challenge was over reliance on the domestic market.

Meanwhile the government reaped 719.3million shillings last year from the production of foreign films within the country.

Assistant minister for information Dhadho Godana informed parliament that the film industry in the country was expanding rapidly and the ministry was in the process of formulating a film policy paper with the hope of improving the industry that is attracting film makers into the country.

He said several taxation measures that are in place that have seen a significant drop in taxation on equipment imported into the country for purposes of encouraging foreign films to be shot in the country.