Key highlights of the 2021/22 budget allocations

Government Expenditure and Net Lending - Sh3.03 trillion  

Ministerial Recurrent Expenditure - Sh1.27 trillion  

Ministerial Recurrent Expenditure include Judiciary -  Sh15.6 billion and Parliament Sh35.8 billion 

Ministerial Development Expenditure - Sh669.6 billion 

Interest Payments and Pensions - Sh697.5 billion

Contribution to civil servant pensions - Sh20.8 billion

Equitable share to Counties - Sh370 billion

Supporting Manufacturing for job creation  - Sh20.5 billion

Enhancing Food and Nutrition Security to all Kenyans  - Sh60 billion

Providing Universal Health coverage to guarantee quality and affordable healthcare to all Kenyans – Sh47.7 billion

Provision of Affordable and Decent Housing for all Kenyans – Sh13.9 billion

Economic Recovery Strategy – Sh23.1 billion

Enhanced security for stability, investment and growth – Sh302.1 billion

Investing in infrastructure to unlock growth potential – Sh310.7B billion

Enhancing access to quality education outcomes – Sh202.9 billion

Environment management and protection, flood control and water harvesting – Sh93.2 billion

Equity, poverty reduction & social protection for vulnerable groups – Sh103.4 billion 

Leveraging on Information, Communication and Technology – Sh23 billion

Sh409.8 billion - Transfer to County Governments Including: Equitable Share Sh370billion and Conditional Allocation Sh39.8 billion 

Taxes

Customs Measures 

•    Finished Iron and steel products to be imported at 25 per cent or corresponding specific rate; 
•    Import duty on leather and footwear products at 25 per cent or corresponding specific rate;
•    Unassembled motorcycles at 10 per cent under Duty Remission Scheme. 
•    Inputs used in textile and apparel sector at 0 per cent under the Duty Remission Scheme; 
•    Import duty on furniture products at 35 per cent duty rate; 
•    Inputs for manufacture of baby diapers at 0 per cent under Duty Remission Scheme; 

Value Added Tax Measures 

•    VAT exemption on Health Products and Technologies to boost health sector. 
•    VAT exemption on goods used in geothermal, oil and mining projects. 
•    VAT exemption on equipment for generation of solar and wind energy. 
•    Transitional VAT exemption on goods used in power generation under power purchase agreements 
•    VAT exemption for asset transferred to Real Estate Investment Trusts and Asset Backed Securities 
•    Bread exempt from VAT instead of being both exempt and zero rated. 

Excise Duty Measures 

•    Rebate on excise duty paid on internet data services purchased in bulk for resale. 
•    Excise duty on locally manufactured sugar confectionary and white chocolate. 
•    Removed excise duty on imported glass bottles. 
•    Changed excise duty rate on Motorcycles from Sh11,608.23 per unit to 15 per cent. 
•    Excise duty on nicotine pouch at Sh5,000 per kg. 
•    Excise duty on betting at 20 per cent of amount wagered. 

Income Tax Measures 

•    Removal of limitation for carrying forward of losses under Section 15(4) of income Tax Act 
•    Thin capitalisation rule changed from debt-to-equity ratio to 30 per cent of earnings before interest, taxes, depreciation and amortization. 
•    National Health Insurance Fund to qualify for insurance relief. 
•    Tax rebate extended to employers engaging TVET graduates as apprentice. 
•    Management and professional fees under the extractive sector harmonized with service fees, in the same sector, at 10 per cent. 

Fees and Levies 

•    Import Declaration Fee (IDF) and Railway Development Levy (RDL) exemption on goods in imported public interest, or to promote investment above Sh5 billion.