Kenyans Drop Luxuries Over High Taxation
Kenyans Drop Luxuries Over High Taxation
Kenyans Drop Luxuries Over High Taxation
The Treasury’s assessment of the nation’s performance for the Financial Year 2022–2023 reveals a drop in the importation of cars and other luxury items. According to the Budget Review and Outlook Paper, which was published on Thursday, the decrease in car imports was accompanied by a drop in excise duty revenue.
Notably, between January and March 2023, car imports decreased by 3%. Data from the Kenya National Bureau of Statistics (KNBS) supports this, indicating that imports of units from Kenya increased to 63,990 in the first quarter of 2023 from 65,801 in the same time the previous year. The drop in imported oil volumes can be ascribed to the fact that a large number of Kenyans choose not to drive their automobiles because of the high cost of fuel, which has been rising since September 2023.
The country missed its excise duty tax target by Ksh29.5 billion, the study claims. The decrease in the usage of cosmetics, beer, and spirits is also responsible for the drop in excise duty.
The first projection was that Ksh293 billion will be collected by the nation between July 2022 and June 2023.However, taxes on building also caused a sharp increase in the cost of essential items.”Domestic Value Added Tax (VAT) collection was mainly affected by subdued growth in the construction, transport and manufacturing sectors owing to the high cost of inputs and increasing inflationary pressures,” according to a portion of the study.”The decline in VAT imports is explained by non-oil imports where the volumes of containerized cargo dropped by 8.4 per cent mainly influenced by changes in buying patterns given the import price pressures.”
Only Ksh271 billion of the Ksh297 billion intended to be collected in domestic VAT during the previous fiscal year was actually realized by the nation.Since January, the cost of some building supplies, such steel, has increased. For example, the conflict in Russia and Ukraine caused a production halt, which resulted in a 30% increase in steel prices in January.These two nations rank among the top exporters of steel to Kenya.
