The local manufacturing sector is among the biggest winners in Yatani’s 2022/23 budget, getting a number of exemptions from tax as the country seeks to reap more from the sector.
The manufacturing sector got an allocation of Ksh 10.1 billion under various implementing Ministries, Departments and Agencies to promote local industries.
Out of this, Ksh 1.0 billion will go to the Credit Guarantee Scheme to enhance access to affordable credit by Micro, Small and Medium Enterprises in the manufacturing sector.
The other Ksh 626 million is for the provision of finances to Micro, Small and Medium Enterprises through the Kenya Industrial Estate.
The manufacturing sector, which is one of the pillars of Uhuru’s big four agenda, is among the country’s largest and most competitive sectors and faces numerous taxation measures.
During the 2022/23 budget presentation, the government exempted inputs and raw materials used in the manufacture of passenger motor vehicles from (Value Added Tax)VAT.
“These measures are meant to promote our manufacturing sector and enhance our exports by making inputs and raw materials used in the manufacture of goods more affordable, hence lowering the cost of production,” Ukur Yatani.
Yatani also noted that some of the measures are aimed at enhancing the competitiveness of locally manufactured goods through protection from unfair competition by imported goods.
The manufacturing sector’s contribution to Kenya’s gross domestic product (GDP) stood at 7.6 per cent in 2020 down from 7.9 per in 2019 which coincided with a plunge in local factory activity during the period as the coronavirus pandemic disrupted local and global supply chains.