Kenya Association of Manufacturers is calling upon the National Treasury to review the existing tax rate to enable existing manufacturers, invest more. The proposals were made during a public forum by the institute of economic affairs, as part of the public participation process.
Key proposals included the creation of a special fund to facilitate Value added tax (VAT) refund and amendments to the Income-tax to facilitate to allow companies that buy out warehouses and manufacturing plants to benefit from investment deduction allowances.
“Investment deduction allowances are only allowed when you are doing actual constructions but are not deducted when you buy a warehouse so you can start a manufacturing hub. This disadvantages one who is constructing and there is no need of constructing in a space where you can buy off. Because there are some investments that are lying idle which out to be offloaded to other users. The recommendation is that investment deductions are allowed on warehouses bought from other places.
“VAT refund stands at around Ksh 27 to Ksh30 Billion. Out of this allocation what is given by the treasury is about Ksh 1.2 Billion which does not reflect what KRA generates from VAT Funds per month. The estimate is that they should be receiving Ksh 5 Billion Ksh so they are able to process these refunds but this is not happening. So what we are asking is an amendment of public finance management act so that so it can include a special fund called a refund fund which will help KRA be able to facilitate the private sector,” noted KAM representative.
Also, players in the agricultural sector have asked the government to put in long term measures to increase productivity in agricultural products.