Economy

NOCK
EconomyNews
James Wambua

Debt-laden NOCK to split into three firms

The National Oil Corporation of Kenya (NOCK) will split into three units, NOC Upstream Ltd, NOC Downstream Ltd and NOC Trading Ltd as the State moves to shore up its fortunes. In a Cabinet brief released on Tuesday, NOC Upstream Ltd will focus on the exploration and upstream production activities and services while NOC Downstream Ltd will market and distribute petroleum products. The third spin off, NOC Trading Ltd will be charged with holding strategic stocks of petroleum products for import and export. The latest spin-offs under President William Ruto are indicative that the State will continue shouldering heavy debt and financial obligations to the…

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KBA
Economy
James Wambua

Excise drives taxes paid by banks up 40 percent to Sh181 billion

In Kenya, the banking sector is increasingly taking a central role in the economy, with a new study showing the sector contributed Kes181.27 billion largely on account of higher excise tax in 2022. The significance of this contribution was magnified in the Total Tax Contribution (TTC) study that shows the financial impact the banks had made in 2022. Led by Alice Muriithi, a Partner at PwC Kenya and the lead technical advisor on the study, the TTC study reported a Total Tax Contribution of Kes181.27 billion in 2022. This was a 39.94 percent increase from the previous year’s Kes129.52 billion. The contribution marks a milestone

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KQ Cargo
EconomyNews

Hospitality sector powers JKIA customs to hit Sh50 billion in collections

The Kenya Revenue Authority’s Customs and Border Control Department has registered a revenue collection growth of 10.12 percent to Kes49 billion at the Jomo Kenyatta International Airport (JKIA) in the financial year 2022/2023. In the year under focus, the department has a target of Kes46.991 billion. The revenue collection represents a 104 percent performance rate against the financial year 2022/2023 revenue target. Cargo handled at JKIA, the region’s busiest airport significantly increased following the reopening of the economy after the Covid-19 pandemic. Rebound in business saw the taxman collect Kes5.39 billion against a target of Kes4.81 billion from air navigation service charge, which is levied…

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IMF Board Kenya
EconomyNews
Otiato Guguyu

IMF sees loans to Kenya’s private sector declining

The International Monetary Fund (IMF) sees loans to Kenya’s private sector declining to a single digit growth this year signaling a dim view of economic activity as the country struggles with weak demand and crowding out effect of the debt paying government. The Fund indicated that credit to the private sector is expected to plunge from 12.5 percent to 9.5 percent. This signal banks will be more willing to lend to the government than to private businesses and individuals. Private sector suffering The IMF Board, which yesterday gave Kenya access to $415.4 million programme loans and additional support as well as new credit line of…

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Safaricom theft
EconomyNews
Otiato Guguyu

Fraud and theft cases rise on tough economy

Kenyans are opting to cut corners to survive the surge in living costs spiking cases of fraud and theft among corporates and famers. Companies have reported cases of increasing internal fraud, contraband and theft of produce in recent weeks indicating a growing trend of errant behavior. British American Tobacco (BAT) Kenya claims that illegal cigarette sales ate up about 25.5 percent of the market last year. In comparison, the menace consumed 11.3 percent of the multinational’s market in 2021, resulting in heavy revenue losses. Part of the reason illegal sales are picking up is due to jump on excise duty that is pushing up prices…

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IMF Kenya
EconomyNews
Otiato Guguyu

IMF Board to decide Kenya fate next week amidst Finance Act court case

The International Monetary Fund (IMF) will meet next week on Monday to review Kenya’s application for extending the programme, accessing additional funds and negotiating a new funding line, even as the country litigates the Fund’s sponsored tax laws. The meeting is also expected to review requests to waive application of some conditionalities and a clause to consult the fund on making monetary policy decisions. Kenya which is in dire need of IMF funds to plug budget holes due to inability to afford commercial loans is keen on accessing an extra $1.1 billion (Kes152 billion) and expand the Fund programme by another two years after reaching a staff…

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KRA
EconomyNews
Kaunga Junior

Hot seat? KRA re-advertises top post

The Kenya Revenue Authority has re-advertised for the post of Commissioner General. The post fell vacant following the shock exit of James Githii Mburu on 23rd February amid a major-shake up that also affected other heads of department. Mr Mburu had served at the helm of KRA for more than three years. His tenure was marked by intense pursuit of alleged tax cheats, including big corporate names such as liquor manufacturers Humphrey Kariuki and TabithaKaranja. On 12th April, KRA advertised for Mr Mburu’s successor implying either the agency has not received suitable candidates or potential Kenyans are disinterested in taking up the role. KRA is…

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William Ruto Finance Bill 2023
EconomyNews
James Wambua

Housing levy, higher fuel costs to hit Kenyans starting July 1st

President William Ruto has assented to the Finance Bill, 2023 and the Appropriations Bill, 2023 ushering in a new age of strained household earnings as the housing levy and 16 percent VAT on fuel are expected to thrust millions of Kenyans into harder economic circumstances beginning on July 1st. Finance Bill 2023 introduces a number of tax measures that Dr Ruto hopes will raise enough resources to finance his Kenya Kwanza administration manifesto and campaign promises such as affordable housing. As the government increases the existing 8 percent fuel VAT to 16 percent, thousands of motorists should expect to pay more at the pump. The…

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Illicit alcohol in Kenya
EconomyNews
James Wambua

Advance excise duty payment plan will choke alcohol makers, drive up illicits

Alcohol manufacturers in Kenya have protested President William Ruto’s administration’s decision to require them to pay excise duty in advance, arguing that doing so will not only strain their businesses but also drive up the prevalence of illicit liquor. Alcoholic Beverages Association of Kenya (ABAK), the industry lobby, claimed that forcing alcohol producers to pay excise duty within 24 hours after removing their products from the stockroom was a policy declaration that would punish innocent players due to failures in tackling illicit alcohol in Kenya. They claimed that although the plan was intended to assist stop the trafficking of illicit alcohol, it is more likely…

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