Report queries missing Sh5.4b for Dongo Kundu

Sunday, June 6th, 2021 00:00 | By
The Dongo Kundu bypass is a project aimed at easing congestion within the island city of Mombasa by connecting South Coast to North Coast without having to pass through the island. PHOTO/Print

Mercy Mwai @wangumarci

National Assembly’s Committee on Trade has raised concerns over a Sh5.36 billion grant from the Japanese government for infrastructure support for Dongo Kundu Special Economic Zones which has not been captured in budget estimates.

The funds are part of cash  meant to actualise the multi-billion project in the coastal region.

In its report for the financial year 2021/2022, the Committee on Trade chaired by Adan Haji pointed this as one of the issues of concern.

“There is a grant of Sh5.36 billion from the Japanese government for infrastructure support for Dongo Kundu Special Economic Zones however the resources have not been captured in the proposed estimates,” read the report.

Treasury has proposed a Sh3.66 trillion budget for the next financial year which begins in July of which Sh1.3 trillion will go to recurrent expenditure and another Sh1.3 trillion to the Consolidated Fund Services (CFS).

Comprehension lacking

The trade committee decried lack of comprehensiveness in submitted estimates for all Semi Autonomous Government Agencies (SAGAs) under the State Department of Trade.

“Others such as Kenya Bureau of Standards and East Africa Portland Cement Company, Industrial Commercial and Development Corporation (ICDC) did not appear before the committee on account that they do not receive resources from exchequer yet they handle public money,” read the report to the Budget Committee.

The committee further wants the National Assembly to approve the zero-rating of the Value Added Tax (VAT) and import duty on commodities.

In its report for budgetary consideration the committee wants commodities touching on coffee packaging and tea imports zero rated.

Import levy

On changes affecting the coffee sub-sector, the committee wants VAT and imports on Jute or sisal bags imported for bagging of Kenyan Coffee for export, Coffee making packaging material for enhanced valued addition zero-rated.

The committee also wants the introduction of an import levy on value added coffee imports to Kenya chargeable at 100 per cent of invoice value for the development of the domestic coffee market.

The committee noted that although Sh2.8 billion is meant to be disbursed to coffee farmers in the FY 2021/2022 from the Coffee Cherry Fund which is under the New Kenya Planters Cooperative Union (NKPCU), structural and managerial weaknesses need to be strengthened.

“The National Assembly in the estimates for revenue for FY 2021/22 consider and approve zero-rating the VAT and import duty tax on coffee making packaging material for enhanced valued addition,” reads the report submitted to the PBO.

On tea, the committee wants VAT on machinery and packaging materials used in tea production be zero-rated to encourage value addition.

In its report, the committee regretted that there are still several projects under the three departments that are at infancy including Development of Freeport and Industrial Parks in Mombasa and the Textile Park in Naivasha.

The committee raised concerns that key performers’ indicators and output do not correspond with the proposed financial allocations in the estimates.

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