Thread by @Ramah_Nyang

GDP growth forecast at 6%, the Finance Minister says, citing agriculture as one of the key drivers.

Curious. We’re smack in the middle of a nasty drought, so what underpins that expectation of agriculture being a key growth driver?

#Budget2022KE #BudgetKE #Budget2022

5.1 million jobs, cumulatively, created in formal & informal sectors, Finance CS says, since 2013.

What he’s not saying: bulk of those jobs have been created in the informal sector, where job security is scarce, earnings are often lower.

#Budget2022KE #BudgetKE #Budget2022

The 'jobs created' line here from the Finance CS is not really the flex the Executive reckons it is. Also, the pace of job creation in the formal sector has been in decline.

#Budget2022KE #BudgetKE #Budget2022

If the economy was as great as the state is arguing, private enterprises would be investing more & creating more jobs. Not less.

#Budget2022KE #BudgetKE #Budget2022

Much needed context on the jobs data that the Finance CS provided. Not only was the country creating far less jobs than it should, earnings for those in the workplace were in decline.

#Budget2022KE #BudgetKE #Budget2022

Equally interesting. The Finance CS speaks about the work done on enhancing transparency in public services.....but neither @KeTreasury, nor @EnergyMinK has made transaction data from the Petroleum Development Fund public.

#Budget2022KE #BudgetKE #Budget2022

KES 383 Billion funding gap in SOEs over the next 3 years, the Finance CS says. Pretty interesting that the Finance CS opted to say nothing about @KenyaRailways_, despite it posting annual losses in the $ 200 M range - *higher* than KQ.

#Budget2022KE #BudgetKE #Budget2022

@KenyaAirways will be required to trim its network, operate a smaller fleet. Yatani: ”I’ll be proposing a budget allocation to meet the restructuring costs.”

#Budget2022KE #BudgetKE #Budget2022

More support for @KenyaPower, going by Finance CS's comments. What form this support will take, is unclear. I’ll re-check this against the Budget Books, the Finance Bill.

Targeted 30% cut in tariffs has not taken place. [Not a surprise]

#Budget2022KE #BudgetKE #Budget2022

The Mortgage Refinancing Company, the Finance CS says, has on-lent KES 2 Billion, and it is processing facilities worth an additional 7 Billion, since September 2020.

#Budget2022KE #BudgetKE #Budget2022

Finance CS proposes amendments to the Retirement Benefits Act to allow funds to invest in unlisted real-estate investment trusts, if they are approved by the Capital Markets Authority.

This will be very contentious, I think.

#Budget2022KE #BudgetKE #Budget2022

Especially since one too many persons have been burned by unscrupulous real-estate developers in #Kenya. Any fund trustee that agrees to put cash into an unlisted REIT had better have done his/her homework.

#Budget2022KE #BudgetKE #Budget2022

Finance CS proposes legal change to compel bodas to take insurance policies that also cover their passengers….so in essence making it compulsory for them to take Comprehensive Insurance? 🤔

I’ll need to re-check this.

#Budget2022KE #BudgetKE #Budget2022

Draft National Tax Policy ready, will be shared with stakeholders for review. Covered a preview of what that may entail, here, with Kevin Chege of @PKFEA:



#Budget2022KE #BudgetKE #Budget2022

Tax collection target for FY 22/23, at KES 2.14 Trillion [$ 18.6 Billion at current $-KES rates]
Fiscal deficit forecast at 862.5 Billion. [$ 7.5 Billion]

$ 100 can be bet that tax target won't be hit.

#Budget2022KE #BudgetKE #Budget2022

Finance CS: broad range of public debt data is readily available.

Where, then, are the debt contracts Treasury signed with the Exim Bank of China, or with TDB? Treasury’s been challenged in court about the opacity around the former.

#Budget2022KE #BudgetKE #Budget2022

The Finance CS, strictly speaking, is playing fast and loose with the facts as far as transparency on public expenditure and public debt is concerned.

#Budget2022KE #BudgetKE #Budget2022

Finances CS proposes spending KES 27.7 Billion [$ 240 Million] to enhance access to affordable housing. Breakdown:
KES 4.4 Billion to KMRC, to expand its capital base, let it lend more
KES 9.9 Billion for building houses

#Budget2022KE #BudgetKE #Budget2022

It's interesting to hear the Finance CS talk about spending allocations for the development of nuclear power. Part of the cash that should have been saved for fuel subsidies was diverted to the Nuclear Power Agency.

#Budget2022KE #BudgetKE #Budget2022

If as recently as in the last FY, @KeTreasury and @EnergyMinK diverted cash meant to subsidize fuel prices into nuclear power spending, what's to stop the same thing from happening in FY 22/23, when crude prices have risen by over 30%?

#Budget2022KE #BudgetKE #Budget2022

This part of the budget speech, while sometimes interesting, is often the low point. Sometimes we just end up marking time at this point, waiting to get to the proposed tax measures. That's where the real news is.

#Budget2022KE #BudgetKE #Budget2022

I'd be surprised if the Finance CS ended the fuel subsidy program [sensible thing to do, since we can't afford it].

I'd be doubly surprised if @KeTreasury had tax cuts on fuel lined up. In Dec, they were vehemently opposed to them.

#Budget2022KE #BudgetKE #Budget2022

Given the mix of agriculture spending proposals we have heard so far [yet to get to tax proposals at this point], I'd love to hear what farmers, farmer representatives in Rift Valley, Central Kenya make of Uhuru Kenyatta's final budget.

#Budget2022KE #BudgetKE #Budget2022

With respect to helping county govts raise their own revenues - it would make sense to eliminate [among other odious nuisance charges] cess tax. There's no sensible value derived from it by farmers, consumers.

Will it happen though?

#Budget2022KE #BudgetKE #Budget2022

Finance Min. tells government entities to clear pending bills by June 30th, 2022.

Supplier debt +45% y/y to over $ 4 Billion [KES 467.7 Billion] by end Dec. 2021. Past efforts to clear pending bills have failed. What's different this time?

#Budget2022KE #BudgetKE #Budget2022

VAT exemptions proposed for inputs used in assembly & manufacture of motor vehicles.

Yatani: “I propose to exempt locally manufactured motor vehicles from VAT.” This is an interesting move. Let’s see if showroom prices shift accordingly.

#Budget2022KE #BudgetKE #Budget2022

Locally assembled passenger vehicles also to not have excise duty charged on them.

VW, Peugeot, Mobius - they're primed to benefit from these tax changes. I wonder how much import demand they might potentially displace.

#Budget2022KE #BudgetKE #Budget2022

He does realize that just changing the name from "Kenya Revenue Authority" to "Kenya Revenue Service" is just meaningless cosmetics, no?

Did the change of the name to the Kenya Police Service make a material difference?

That deposit of 50% of the sum in dispute after a Judgement from the Tax Tribunal, is *very* likely to be challenged in court, I think. Argument might be that it's an artificial disincentive to stop people from suing KRA in court.

#Budget2022KE #BudgetKE #Budget2022

The Finance CS admits that "tax disputes take too long to conclude." So, on that basis, telling firms they must lock up capital in order to challenge a tax charge makes no sense. It's an artificial barrier to accessing justice.

If GoK can't pay suppliers on time, what reason is there to believe cash held in escrow:

[1] won't be diverted as happened with fuel subsidy funds?
[2] you'll actually get it back on time + interest to reflect the opportunity cost incurred?

#Budget2022KE #BudgetKE #Budget2022

Devil's in the details with respect to the change here on Excise Tax.

The forecast of no change on taxes applied to petroleum products, so far, seems to be an accurate one. Waiting to get the 2021 Finance Bill for a detailed look.

#Budget2022KE #BudgetKE #Budget2022

I wonder, does this apply the mega irritating betting ads that show up on @YouTube?

If not, might we see a reduction in ad spend away from traditional media, into platforms with a lower tax implication, like YT, TikTok, IG?

#Budget2022KE #BudgetKE #Budget2022

In his words, Finance CS admits Govt is slow in processing even legitimate tax refunds.

But then @KeTreasury proposes measures to seize more capital from firms challenging tax policy & implementation.

Contradiction, much?

#Budget2022KE #BudgetKE #Budget2022

@KeTreasury forecasting a 21% rise in income taxes it can raise in FY 22/23.

From where though, given the income & jobs damage inflicted by the #pandemic, and an inflation surge eroding purchasing power in #Kenya?

#Budget2022KE #BudgetKE #Budget2022

Re, this net borrowing figure. That works out to roughly $ 2.4 B.

Related question. When Banks know you're borrowing KES 40 B 3-year debt at ~ 11.8%, and you have a 581 B hole to fill, why would they lend into the private sector?

#Budget2022KE #BudgetKE #Budget2022

I wonder how big this IFB note will be, *if* it comes to market.

#Budget2022KE #BudgetKE #Budget2022

Summary of spending plan presented by #Kenya's Finance CS, April 7.

0.97% cut in the Judiciary's budget y/y.
Parliament on the other hand, had its allocation raised by 30.7%.
13.8% rise in CFS spending [most of which is debt service].

#Budget2022KE #BudgetKE #Budget2022

This is a ridiculous loophole that MPs gave @KeTreasury.

Funds meant to subsidize retail fuel prices have already been improperly allocated. So why give a June 2023 deadline to ensure cash in this fund is ring-fenced & properly used?

#Budget2022KE #BudgetKE #Budget2022

@KeEquityBank, which $ 6.89 Million facility is this from GoK?