Those who spoke to Capital FM Business want the 16 percent Value Added Tax reviewed especially for basic goods.
Economic experts have already predicted additional taxes as the government seeks to raise money to fund heavy infrastructure projects.
“We are heavily taxed, the government needs to review that, the government can tax other non essentials but not basic needs,” said Cosmas Nzomo a Nairobi resident who was backed Anthony Kiboro a barber In the city centre who urged the Treasury not to add taxes on any items.
“Treasury always adds VAT on items almost all the time the budget is read, we ask them to give us a break this year,” Kiboro said urging the government to look at ways that will bring interest rates down in the fiscal year.
Martin Mwatete a student at the University of Nairobi says security still needs to be prioritised in the budget as well as infrastructure especially roads to spur economic growth.
“Further investment needs to go on to security. We need to secure our borders, following continued attacks from Al Shabaab,” Alice Wambui added.
Last year, Treasury Cabinet Secretary Henry Rotich introduced excise tax on vehicles, motorcycles, cigarettes, fruit and vegetable juices and water to cater for the current year’s budget.
Genghis Capital Research Analyst Vinita Kotedia says the Treasury should seek new budgetary sources in order to create a balance and neutralise pressures on the local debt market.
“Ideas like borrowing from the Asian market are good options and should be taken into further consideration as it would reduce the debt burden on the Treasury as well as prevent volatility and interest rate distortion in the domestic market,” she explained.
On his part, Research Analyst at ABC Capital Joshua Otiende says government should continue investing more in infrastructure that will offer much needed support to economic growth citing that heavy capital expenditure by government has supported economic growth despite major shocks.
The government should focus on other ways to ensure fiscal stability In the economy, for instance heavy investment in agriculture to improve food security might positively impact inflation as food (one of the major basket of items in calculation inflation) will be affordable, also, Investments geared towards reducing the cost of energy will have a positive impact on the cost of doing business since and stimulate economic growth,” Otiende told Capital FM Business.
He also urged the government to improve the quality of education through a school upgrading program that will not only improve literacy levels but provide the much needed human capital a growing economy needs.
“Diversification of our sources of foreign earners will help the country improve the account deficit and in effect stabilise the exchange market. The country needs to focus on improving trade within Africa if we are to sustain the growth momentum,” he added.
The National Treasury has invited individuals, institutions and the private sector among others to submit proposals that could be considered when preparing the National Fiscal Budget for the financial year 2016/2017.
According to Treasury Principal Secretary Kamau Thugge, the move is constitutional and caters for openness, accountability and public participation in financial matters.
“In accordance to Article 201 (a) of the constitution, which calls for openness, accountability and public participation in financial matters, the National Treasury hereby invite the private sector, non-governmental organizations and individuals to submit proposals on economic policy measures that the Cabinet Secretary could consider in preparing the National Fiscal Budget for the Financial year 2016/2017,” read Thugge’s statement.
Pan Africa Asset Management Portfolio Manager Kevin Kiprono however says the approach would have been executed differently.
“At the moment, the country has a Vision 2030 strategy that should be driving the budget. The initiatives of the strategy are linked to specific sectors, and the players/experts in each of these sectors should be consulted on how far off we are in tracking our objective. The proposals will arise at this level on what factors should be included to spur economic growth, what has been achieved and what’s missing, what are their costs and how much revenues should be expected on each initiative,” Kiprono explained.
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