On 11 June 2020, the Finance Ministers of the East African Community (EAC) member countries, with the exception of Rwanda, continued the tradition of the synchronised presentation of their respective budgets.
All the EAC member countries registered negative GDP growth rates, primarily occasioned by the outbreak of the Coronavirus disease 2019 (COVID-19) pandemic which has had a devastating impact on global economies, people’s health and livelihoods.
Most of the measures proposed are therefore largely stimulus packages and social safety net programs designed to provide relief from the economic hardships that may have arisen from the specific restrictions aimed at curbing the COVID-19 pandemic and to facilitate quick recovery once the pandemic is brought under control. It is on this backdrop, that the EAC member countries presented ambitious budgets which have effectively balanced tax and economic reliefs against the anticipated potential revenue gaps.
Riding under the theme of “Stimulating the Economy to Safeguard Livelihoods, Jobs, Businesses and Industrial Recovery,” this year’s budget process has seen Kenya adding an 8-point Economic Stimulus Plan to its ambitious “Big Four” Agenda; Uganda focusing on improving the wellbeing of its citizens, boosting economic transformation and improving good governance and Tanzania prioritising amongst others, economic growth, industrialisation and providing an enabling environment for doing business and encouraging investments.
We expect a raft of legislation across the region to anchor these expenditure proposals and the revenue raising measures in law and shall keep you updated as and when they happen. In the meantime, we have reviewed the respective budget speeches and now provide a summary of the budget proposals and tax measures across the three countries for your consideration.
© 2020 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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