Budget 2018 implications: What to expect
To encourage construction of more housing, Rotich is expected to make taxable supplies imported or purchased for exclusive use in the construction of a minimum of 5,000 housing units by a licensed SEZ entity VAT exempt. The move expected to make housing affordable will however mean that construction materials suppliers will not be able to claim input tax credits a move that may result into an increase in the cost of such materials.
Safety boots for firefighters, and protective clothes used in hospitals and Clinics – more expensive Suppliers will pass down their irrecoverable VAT to consumers, a move that may make healthcare more expensive.
Fishing equipment to be more expensive – The move may affect the blue economy as nets, fish processors and other accessories will be more expensive.
Medicine – May be more expensive Some medications and approved inputs or raw materials (either produced locally or imported) supplied to pharmaceutical manufacturers in Kenya for manufacturing medications have also been shifted from zero rating to VAT exempt regime. This is likely to push further prices of the affected medications. Ambulances and other emergency relief equipment will also be more expensive under a similar tax regime shift.
To be more expensive, Rotich had zero rated wheat flour last year but that is set to change
It may also be more expensive to check in travel bags with treasury expected to shift imported passenger baggage including unaccompanied baggage to VAT exempt from the current zero rating.