Kenya: Trade implications of 2009/2010 Budget.
On 11 June 2009 the Minister of Finance of Kenya presented to Parliament that country's budget for the fiscal year 2009/2010. This budget had the following implications for international commerce:
1. Removal of the Sugar Development Levy on imports of refined sugar "by gazetted manufacturers."
2. Exempt from import duties all industrial spare parts.
3. Remit all duties on imported raw materials used to produce sanitary towels (it being noted the imports of sanitary towels and tampons are already duty free.)
4. Exempt from import duties the inputs used by the paper and paperboard mills. The following rationale was given for this change: "our leading paper mills have been experiencing operational challenges in the recent past originating from imported cheap and subsidized paper and paperboard products. In order to cushion the mills and to enable them compete with these imports, I propose to grant a remission of duty on inputs for use by paper and paperboard mills."
5. Removal of import duties on asbestos fibres used to produce brake linings and pads. It was stated that this measure was taken to promote the manufactures of the latter products.
6. "I propose to reduce import duty on all synthetic yarns, acrylic yarn, polyester yarn and high ferocity yarn from the current rate of 10% to 0%. Further, Mr. Speaker, in order to encourage the expansion of cotton sector, I propose to zero rate VAT on locally produced and ginned cotton."
7. Exemption from import duty of all four wheel drive cars that are especially designed and built for tourism.
8. To promote the local film industry it was proposed to "remove the current import duty of 25 percent and VAT of 16 percent on television cameras, digital cameras and video camera recorders." A zero VAT rate would be introduced on "taxable goods and services offered to film producers."
9. To promote the exploration for oil, gas, and geothermal energy it was proposed "to grant import duty exemption 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."
10. "KPLC and Telkom Kenya have been experiencing serious challenges through vandalism of their copper wires and other equipment. To address this vice and protect the equipment of KPLC and Telkom Kenya, I have imposed a ban on exportation of scrap aluminum, steel and copper wires and cables. This measure is expected to enable KPLC and Telkom Kenya to continue providing Kenyans with these essential services."
11. Increase import duty on wheat to 25 percent.
12. "...to also support our dairy farming sub-sector through further incentives, I propose to grant an exemption of import duty and to zero rate for VAT, heat insulated milk tanks, to help dairy farmers in preserving their milk."
13. Reduction of import duty on second hand clothes to 35 percent or US$0.20 per kilo, whichever is higher.
14. Exemption from import duties of all products imported by the Kenyan Committee of the Red Cross.
15. "I propose to gazette known exporters who will qualify for (VAT) zero rated supplies get supplies zero-rated. This measure is expected to greatly assist our horticultural and floricultural exporters, in turn improving their cash flow position.
Any Evidence-Based Deliberation:
|Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations?||No|
|Is there any evidence that alternatives to the proposed measure were considered?||No|
|Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government?||No|
|Was such evidence identified?||No|
|Is such evidence publicly available?||Don't Know|
|Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives?||No|
|Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken?||No|
|Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory?||No|
|Did the government state its intention to review the measure within one year of implementation?||No|
Date Discovered: 18/08/2009
Date of inception: 11 Jun 2009
GTA Evaluation: Amber