In Summary

  • Paraffin, cosmetics, motor vehicle import, services providers as well as local air travel services bore the burden of the Sh2.3 trillion budget on consumers.

  • The measures laid out by Treasury Cabinet Secretary Henry Rotich in the 2016/2017 budget took effect without any grace period.

  • Local carrier Jambo Jet informed customers of price changes only days after the budget was read.

Immediately budget proposals were made on June 8, traders and entities dealing in affected goods and services increased prices without delay.

Traders in paraffin, cosmetics, motor vehicle import, services providers as well as local air travel services bore the burden of the Sh2.3 trillion budget on consumers.

The trend, which is characteristic of the market where price increases are immediate while price drops are delayed, was recently criticised by the Kenya Private Sector Alliance (Kepsa) chief executive Carole Kariuki.

She said the government had done well in improving the ease of doing business but the translation of benefits to consumers was slow.

“I think it is just a policy issue where benefits to consumers are always slow to achieve. It is important that this scenario changes so that the common man is able to benefit faster when certain reliefs are given by the government, the same way expenses are adjusted,” Ms Kariuki said.

The measures laid out by Treasury Cabinet Secretary Henry Rotich in the 2016/2017 budget took effect without any grace period.

Local carrier Jambo Jet informed customers of price changes only days after the budget was read.

“Our base fares have increased by Sh100 following the increase of Domestic Travel tax from Sh500 to Sh600” read a note below the ticket information.

The confusion was fuelled by the fact that some proposals in the Finance Bill 2016 relating to various taxes and duties which were expected to take effect next month, were backdated.

The Bill is yet to be passed in parliament, through.

Tax experts are equally puzzled by the backdating of the amendments, creating confusion among businesses and causing sudden cost adjustments.

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