Yatani faces Sh9bn hole after cooking gas, plane tax scrap

Monday, June 22, 2020 0:01

By OTIATO GUGUYU

Treasury Secretary Ukur Yatani.

FILE PHOTO | NMG 

Treasury Secretary Ukur Yatani faces a tough balancing act in his effort to cut fiscal deficit and tame public borrowing after MPs scrapped a number of proposed taxes, creating a Sh9 billion hole in his budget.

Last week, the National Assembly’s Finance and National Planning committee cancelled taxes proposed on pensions, helicopters and liquefied petroleum gas (LPG).

Mr Yatani had targeted to generate Sh8 billion by levying 14 percent value added tax (VAT) on helicopters, tractors, aircraft tyres, cooking stoves and motor vehicle imports.

This gap has been blown by offering tax breaks on sales and incomes to cushion consumers from the effect of Covid-19, measures that created a Sh172 billion hole.