President Uhuru Kenyatta has proposed a fuel tax cut from 16 to eight per cent, meaning the price of petrol will drop from Sh127 to Sh118 and that of diesel from Sh115 to Sh107.
The president announced this during a national address on Friday, on matters including Finance Bill, 2018, which he reviewed and returned to Parliament on Thursday evening.
President Kenyatta began his televised address from State House, Nairobi County, with a breakdown of development projects since the Jubilee administration took over in 2013.
He noted that more than Sh1 trillion has been transferred to counties since that year and cited road construction, maternal care, free primary education, free public day secondary school education and the availability of text books for students.
Mr Kenyatta also noted the Memorandum of Understanding with the United States for direct flights from Nairobi to New York, investments into the Jomo Kenyatta International Airport and the Standard Gauge Railway, benefits from the National Hospital Insurance Fund and stipends for the elderly.
“All these cost money … your taxes have paid for clear and tangible products. This will propel our country to new heights of development,” he said.
The president also spoke of “bold decisions” for the sake of development, the fight against corruption and social protection programmes.
“All these we have done without substantial increases in taxes over time [but] we have to pay for the new constitutional order and the public services Kenyans depend on. These cost money.”
He added, however, that “it is clear that you are all troubled by the effects of the rise in the price of petroleum products and its impacts on the cost of living”.
The president therefore asked Parliament to cut the fuel Value Added Tax (VAT) by 50 per cent and said he expects the relevant authorities ” not to take advantage of weary Kenyans and to lower the prices without any delay”.
Mr Kenyatta rejected the Bill that sought to raise Sh1 trillion in revenue, including Sh70 billion from the tax on petroleum.
The National Assembly will now discuss the proposals in two special sittings on Tuesday and Thursday next week.
The president noted that Kenya still faces gaps in financing so this step alone will not balance the budget.
As such, Mr Kenyatta also proposed budget cuts across all arms of government and more resources for the Judiciary, the Ethics and Anti-Corruption Commission and the office of the Director of Public Prosecution for the fight against graft.
He did not specify the spending cuts but said they will touch on travel, seminars and training as well as hospitality.
“We in government also need to tighten our belts so that the dedication of Kenyans in paying taxes is matched by discipline in our use of the taxes,” he said.
Mr Kenyatta told the public that he has to make a delicate balance between short term pain and long term gain.
He listed the 67 senators, the 349 MPs, the 16 constitutional commissions, the 1,400 members of the county assemblies and the Sh1 trillion that has since been pumped to the 47 counties as some of the reasons why Kenyans needed to tighten their belts.
“We have to pay for the new constitutional order because it costs money,” the president said. “Further delays in implementing these tax measures will compromise our ability to deliver on our basis promises to Kenyans.”
But he added: “I assure Kenyans that their taxes will be used well.”
To the Judiciary and the DPP, he said: “Work closely together to help us restore our faith in public institutions.”
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.