BUDGET 2008I must confess i was pleasantly surprised, i expected capital gains Tax, more taxes on second hand vehicles etc.First it was smaller than i expected at about Ksh 720 billion(was expecting a Ksh 850 billion plus budget). Here are the specifics:
THE GOOD
-Stronger Regulation for the Capital Markets.There are now restrictions on ownership of stockbrokers,investment banks and fund managers.By the way Banks,Insurance companies and similar corporate entities are exempt from these restrictions.
Let us hope that the new rules will keep us from a repeat of the Francis Thuo,Nyaga stockbrokers debacles.
The new ownership requirement will increase the number of politically correct persons(read new ODM personalities) with stakes in the Capital markets.i.e. has anyone noticed who owns the stock brokerage firms?
-No new taxes on personal or corporate incomes.What can i say? More taxes= less disposable income. -Senior citizens over 65 years of age exempt from taxes on their pensions.
NOT GOOD
-New capital requirements for banks. I thought Ksh 1 billion in core capital over 2 years was a joke.
I approximate over 60% of the banks are multiples over this Ksh 1 billion core capital amount.For example if Housing Finance successfully completes its rights issue,the core capital will be over Ksh 2 billion.Barclays has over Ksh 5 billion. The requirement is unlikely to spur mergers and acquisitions.
-No Value Added Tax decrease
VAT acts as a drag on consumption.Lower VAT and consumption might get a kicker with all the added benefits e.g. higher demand in the economy.
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APPLE 3G IPhone
Apparently,Orange/Telkom Kenya have the rights to sell it in Kenya.
http://www.apple.com/iphone/countries/ke/
4 comments:
The analysts term it a balanced budget with the poor man in mind. For the middle class dude that I am, I'm not really seeing it having an impact in my life. But it's overall good for the country.
I thought by now you'll be one of the beneficiaries of the new ownership rules for investment banks ;-)
@Mwasjd: Most 'analysts' quoted in the media have poor analytical skills and only state the obvious.
The middle class will be squeezed coz their only assets are their mortgages and depreciating cars that they own on loans.
The poor will get poorer and the rich richer as inflation increases the value of their real assets.
About the new ownership rules its too late for the likes of me.In a few years a brokerage licence will be an easy thing to get.No need to own a slice of a company if u can own a bigger slice with your pals.
So who owns the brokers (& who are the ODMers) & does it matter as long as they are not favoured?
D&B is Mbaru (PNU)
Standard is Wangunyu (Kikuyu?)
CFC (corporate owned CFC-Stanbic)
NK & Co (Kikuyu & PNU but he has been around for years)
Drummond (GEMA)
Solid/NIC Capital (Corporate but ndegwa - kikuyu controlled)
Kestrel (biwott's family KANU/PNU)
Thuo & Nyaga were GEMA...
But does it matter unless there are shenanigans?
The thing about the bugdet is follow through and goodwill. Kimunya sounds serious but I don't think the establishment is 100% behind him. They still want to play hanky panky with tax payers money.
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