© 2009 crowe horwath international audit | tax | advisory the east africa budgets: comparative...
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© 2009 Crowe Horwath International
Audit | Tax | Advisory
THE EAST AFR ICA BUDGETS:
COMPARATIVE ANALYS IS OF 2015 /2016
P O S T B U D G E T R E V I E W B R E A K FA S T M E E T I N G
S E R E N A H O T E L , 1 5 J U N E 2 0 1 5
C O U T T S O T O L O , C H I E F E X E C U T I V E O F F I C E R
Exceeding Expectations
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Overview of Parker Randall Eastern Africa
Introduction to EAC 2015/16 Budget
An Overview of the EAC Economic Environment
Priority Sectors Across the EAC Region
Measures in the Budgets to Facilitate and Sustain Regional Growth
Potential Business Opportunities
Contradictions / Issues Arising from the Budgets
Q&A
Presentation layout
© 2009 Crowe Horwath International
A connected international firm that provides proactive solutions to business at local, regional and global level.
Global Provider of Assurance, Tax and Advisory Services.
Presence in over 43 countries,100 offices and 2000 Partners and professional staff.
Structured into 5 regions; Americas, Europe, Middle East, Africa, and Asia Pacific.
Parker Randall Eastern Africa is the Africa Leader.
Anchor Africa offices in Mauritius, Kenya, Rwanda, Egypt, Botswana, Sudan and Nigeria.
Parker Randall Eastern Africa serves the client needs across over 14 countries in the EA region:-
Established 2014
5 Partners across all the service lines
Partners, Directors and Managers with big 4 experience
32 employees and growing
Parker Randall
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Examines four EAC Economies – Kenya, Tanzania, Uganda and Rwanda
Budget speech and financial period coordinated across the region
Average EAC projected economic growth is above the global estimate (6.5% against 3.5%)
The EAC budgets have allocations to enhance regional integration and promote intra trade
Opportunities and challenges for investments in the region
The table below indicates the overview of EAC economic performance.
Introduction to EAC 2015/16 Budgets
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Indicator Kenya Tanzania
Uganda
Rwanda
Population (Million) 42.8 49.6 35.8 11.3
GDP (US $ bn) 59.2 36.4 24.9 9.0
Projected econ growth (%) 7.0 7.3 5.8 6.5
Inflation (%) 6.9 4.5 5.5 2.6
Budget amount(US$ bn) 21.0 10.5 7.7 2.6
Domestic revenue (US$ bn) 13.2 6.5 3.6 1.5
Domestic financing (US$ bn) 2.4 2.9 2.3 0.2
External financing (US$ bn) 3.5 1.1* 1.5 0.4
Appropriations in aid & grants (US$ bn)
1.9 - 0.3 0.5
An Overview of the EAC Economic Environment
* This represents grants and loans from external sources.
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Kenya Tanzania Uganda Rwanda
Security – 13%
Election and referendum
Infrastructure – 18%
Infrastructure & Energy – 16%
Infrastructure(energy & ICT & transport) – 15%
Rural development – 6.2%
Energy – 15% Agricultural transformation – 7%
Agricultural transformation – 4%
Infrastructure & transportation – 15.1
Health – 11% Education and health – 38%*
Tap latent talent – 2%
Energy and minerals – 5.7%
Security – 9%
Priority Sectors Across the EAC Region
* Include the other component of EDRS I – Macro Economic stability and Public Finance Support organs.
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Harmonization of import and export duties and VAT: Reduction of IDF in Kenya from 2.25% to 2.0 %
Export duty rate on hides and skins to 80%
Zero rating of services in respect to goods in transit. Previously exempted
Increase of import duty across various products to encourage to local production(Semolina, toothpaste tubes, fishing nylons, sugar)
Investment in infrastructure to improve connectivity
Addressing insecurity concerns (tourism, businesses)
Provisions to enhance the capacity of Institutions mandated to fight corruption
Intention of developing a framework to facilitate leasing as an alternative financing mechanism for capital expenditure
Measures in the Budgets to Facilitate and Sustain Regional Growth
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Implementation of Trade Net System (single window system) i.e. Kentrade in Kenya.
Establishing fully integrated one stop centre for investors across the region e.g. RDB in Rwanda
Improving public service delivery examples i.e. Huduma Centres.
Rehabilitation and improvements of airports – e.g. Entebbe, JKIA, Malindi and Kisumu.
Establishments of industrial parks Tax incentives - on-job training for 10 graduates Structural reforms in the financial sector
Core capital of Kenyan banks and Uganda Development Bank.
Core capital and risk based capital of insurance companies.
Measures in the Budgets to Facilitate and Regional Sustain Growth (Cont’d)
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Pasta manufacturing Agricultural sector – value addition, farm inputs,
farming Construction sector
293 schools in Uganda
Industrial parks
SGR
Industrial supply chain - 40% local content Film industry – exempt WHT for crews and actors,
VAT exempt on goods and services; proposed fund for rebating expenses by producers
ICT sector Textile and leather industries New investments in water facilities and small
holder irrigation equipment – reap on tax incentives.
Potential Business Opportunities Within EAC
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Requirement of gazettement manufacturers of specific products e.g. pasta manufacturers
Duty remissions of duties across some sectors/products
Establishing of a National Construction Company – unfair competition
Sin tax vis-à-vis illicit brews
Strengthening of Anti Laundering Act vis-à-vis planned measures to encourage repatriation of wealth held abroad
Cost burden of infrastructure spending i.e. Kenyan fuel levy
M-Akiba bond- enhance savings at the expense of discretionally spending
Contradictions / Issues Arising from Budget
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