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Tax collection slows down in July

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Economy

Tax collection slows down in July

The Kenya Revenue Authority headquarters in
The Kenya Revenue Authority headquarters in Nairobi. FILE PHOTO | NMG 

Tax collections in the first month of the current financial year ending June, 2019, grew at a slower pace compared with same period last year, Treasury statistics showed on Friday, signalling reduced economic activity.

The Kenya Revenue Authority (KRA) netted Sh107.87 billion in July, a growth of 8.99 percent over the Sh98.97 billion collected in the same period a year earlier.

The growth was slower compared with 12.74 percent increase recorded in July 2018.

Tax collections are usually lower at the start of the financial year in July, mainly on little or no development expenditure by the Government and delays in kick-off of new taxes pending lawmakers’ approvals.

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The State Department of Energy was the only one that spent on development in July.

Counties have also not been allocated cash following a stalemate over the Bill that guides sharing of revenues between the devolved units and national government.

The taxman has in recent years struggled to meet revenue targets.

In the year to June2019, the target was moved twice from initial Sh1.69 trillion to Sh1.61 trillion in December and eventually to Sh1.51 trillion in June, but was still missed by Sh72.66 billion in the end.

“Targets are a matter of balancing ambition and the reality of what’s happening in terms of economy,” KRA’s deputy commissioner for strategy, innovation and risk management Joseline Ogai said.

“We have not succeeded for the last few years, but our objective is always to meet the target as printed. But what underpins those targets is ambition.”

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Chinese firm says grooming Kenyans to take over SGR : The Standard

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The Chinese government will hand over operations of the Standard Gauge Railway to Kenyans in six years. 

Africa Star Railway Operation Company (Afristar) is contracted to run and maintain the 592km Standard Gauge Railway (SGR) for 10 years after which management will revert to Kenyans.
Now in its fourth year since the deal was signed in May 31, 2017, the company is celebrating 1,000 days of safe operations together with a successful skills transfer programme.
Afristar General Manager Liu Jiuping said this week that skills transfer and subsequent handover of operations to locals was on the right track, having already hit the 80 per cent mark.

SEE ALSO :Chinese borrowers drown in online lending’s ‘bottomless pit’

“Since operation commencement, Afristar has been building a quality SGR brand through detailed management, people-focused service, optimised transport organisation mode and allocation of resources,” he said.
Afristar said the localisation drive boosted by continuous professional development had seen 1,072 Kenyan employees now capable of independently performing their duties.
Moreover, some 252 Kenyans now work in leadership positions. Of the said number, four Kenyans have so far been appointed into senior management positions led by a Deputy General Manager, Freight Marketing Manager, Deputy Passenger Transport Manger as well as Deputy Manager— Corporate Affairs.  

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

“A total of 29 junior locomotive drivers now work without [close] supervision,” said Afristar in its report.
The firm also said the now Nairobi-Naivasha locomotive is driven by Kenyan drivers only.

SEE ALSO :Chinese TV channel pull live coverage of Arsenal vs Man City over Mesut Ozil comments

Afristar further said some 279 Kenyans now work in the transport department with some 17 of them at the intermediate station.
Moreover, so far there are nine Kenyan train dispatchers and four track inspectors. Another 144 work in the track and signaling department with 17 on board as equipment signal engineers.
The company said 78 Kenyans also serve as locomotive inspectors.  
Other achievements of the company include transporting more than 4.2 million passengers as well as ferrying cargo approximating 750,000 Twenty-foot equivalent units (TEUS).
Kenya Railways Managing Director Philip Mainga lauded the operator for conducting its operations efficiently thereby also enabling the company attain that many days of accident free operations.

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SEE ALSO : Malware broker behind U.S. hacks is now teaching computer skills in China

“It is a great joy for us in the rail transport sector to have attained such a mark. This is because when we developed the Railway Master Plan for Kenya a few years ago… we envisioned a cost effective infrastructure that would play a critical role in the improvement of national competitiveness,” he said.


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ChineseSGRAfrica Star Railway Operation CompanyStandard Gauge Railway

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Unga Group halves profit : The Standard

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Unga Group net profit halved for the six months period ending December 31, 2019 compared to a similar period in 2018.

Unga Group registered a profit of Sh151 million in the period, down from Sh306 million in 2018.
This drop was attributed to reduced volumes in the animal nutrition segment and increased cost of wheat and maize grains. The low production and inflated costs were caused by unfavourable weather conditions in the year.
In 2019, rains came late in the year, in volumes that left a trail of destruction. Unga Group’s profit before tax grossed Sh219 million, down from Sh437 million in 2018.
Revenue, however, increased by 11 per cent, from Sh9 to Sh10 billion, helped by the human nutrition business.
Unga feels that the main challenges that affected the industry in 2019 might persist.
“The continued low consumer demand, coupled with excess production capacity, aggressive finished product pricing across the industry and restricted maize grain supply will remain a challenge. The board and management will continue to work on strategies to deliver improved performance,” read the report.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  


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Kenya Airways back at Treasury for Sh5b bailout : The Standard

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Kenya Airways has gone back to the government for a bailout. The airline said it has secured a Sh5 billion commercial loan from the National Treasury to service some of its aircraft engines and streamline operations.
At the same time, the listed loss-making national carrier announced looming changes in its operations and corporate structure. The looming shake-up comes a day after the appointment of Allan Kilavuka as chief executive to replace Sebastian Mikosz, the Polish expat unable to turnaround the airline and left before his first term in office lapsed.
In a disclosure to the Nairobi Securities Exchange, KQ Chairman Michael Joseph said the loan, acquired on Wednesday, was intended to complete an engine overhaul of its Embraer 190, its largest fleet and also boost working capital.

SEE ALSO :KQ Board appoints acting Chief Executive Officer

The cash injection will cater for the overhaul of 11 Embraer engines which is required every eight years in order to uphold high levels of safety and maintain reliability and planned network schedules.
“As an airline, we need to be efficient across our operations but more importantly across our fleet. The Embraer fleet is our largest and is the networks’ workhorse. We also plan on undertaking refurbishments on our two Boeing 737-700 aircraft. The airline commits to prudent utilisation of the funds to ensure value for money,” said Joseph.
The new loan adds to the numerous instances where the government has come to the aid of the airline. Last year, Treasury said it had forgiven a Sh24 billion debt the airline had taken over the previous three years.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

And in April last year, the ministry disclosed to Parliament that it had taken a Sh20 billion loan from Eastern and Southern African Trade and Development Bank (TDB) to repay another loan from Africa Export-Import (Afrexim) Bank that had fallen due.
Treasury also converted some of its debts to equity during a restructuring that KQ undertook in 2017, increasing its stake to 48.9 per cent from an earlier 29 per cent.

SEE ALSO :Public relations firm Gina Din sold

Joseph added that the listed airline was in discussions with the government – its majority shareholder – for a possible restructuring of the operations and corporate structure of KQ.
“KQ is also in discussions with the government with respect to collaboration between KQ and other stakeholders in the Kenyan aviation industry, including a possible restructuring of operations and corporate structure,” said Joseph.
Strengthen the fleet
On Thursday, the airline said it had appointed Kilavuka as CEO. He serves as the chief executive of KQ’s low cost subsidiary Jambojet and starts work on April 1 and all eyes are on him to steer the turnaround started by his predecessor. 
Kilavuka said Kenya plays a vital role in the aviation industry in Africa and the capital injection would aid KQ operations and strengthen the fleet.

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SEE ALSO :KQ issues profit warning

“As a strategic national asset and key driver of Kenya’s economic development and GDP growth, it is important that the airline continues to operate optimally. It is on this premise that this year, we identified six key areas of focus which are: improving our customer’s experience, reducing costs and wastage, strengthening operational efficiency, stabilising the organisation, growing our profitability and managing relationships with our stakeholders,” said Kilavuka.
MPs in July last year, voted to nationalise the airline as a way of saving it from mounting debts, meaning the government will buy out other shareholders.
Local banks, through KQ Lenders Limited 2017 own 38.1 per cent, KLM owns 7.8 per cent and the balance held by retail investors.
KQ has been on a loss-making streak and posted a Sh7.5 billion loss for the year ending December 2018.


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Kenya AirwaysTreasuryKQMichael Joseph

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