State to slash SGR budget by Sh3.6bn
President Uhuru Kenyatta launches the cargo freight services of the Standard Gauge Railway at the Port Reitz Station in Mombasa on May 30, 2017.
The kitty designated for aggregating funds for operating the standard gauge railway (SGR) is set for a Sh3.6 billion cut in collections in the 2023-2024 financial year if proposals in the Finance Bill, 2023 sail through public participation and Parliament in their present form.
The Bill seeks to amend Section 8 of the Miscellaneous Fees and Levies Act of 2016 reducing Railway Development Levy (RDL) from 2.0 per cent to 1.5 per cent, one of the proposals that President William Ruto has touted as a key pillar in the latest tax proposals aimed at improving the business environment.
“I have said yes, we are going to increase Value Added Tax on fuel by eight per cent, which will give us about Sh50 billion, to deal with the challenge of roads across the country. To balance it out, I have removed Railway Development Levy and Import Declaration Fee”, President Ruto said while addressing a joint media interview on Sunday evening.
According to data from the National Treasury, collections from RDL are now projected to decline by Sh3.6 billion from Sh36.8 billion in the current financial year to Sh33.2 billion in 2023/2024.
In the current financial year, collections generated through RDL were first set at Sh35.1 billion before being revised upward to Sh36.8 billion in the Supplementary Budget.
In 2020/2021 and 2022/2023, collections generated through RDL have grown by 29.2 per cent from Sh28.5 billion.
