Penalty for bank’s violating the law has been increased three-fold while insurance companies will have to pay claims within a month in far-reaching changes aimed at enhancing integrity in the sector.
In his budget statement yesterday, National Treasury Cabinet secretary Henry Rotich said banks will be fined Sh20 million up from Sh5 million for violating any laws under the Central Bank Act in a bid to restore good governance in the sector, which has faced a crisis recently following the closure of three banks and money laundering allegations against some lenders.
“This amount has proved to be too little compared to the seriousness of some of the violations institutions have committed. I am therefore proposing to increase the maximum penalty to Sh20 million and to allow for additional penalties for each day that the violation continues,” he said.
For insurance, Rotich proposed to reduce the time within which underwriters pay claims by two months, from the current 90 days to 30 days.
However, the tourism sector can sigh in relief following positive measures taken to aid its recovery after a four-year slump mainly due to insecurity in the country.
Visitors to national parks and game reserves will be exempted from Value Added Tax while tour operators will be exempted from paying VAT on their commissions, which will encourage both domestic and international tourists to visit parks across the country.
The tourism ministry has also received a Sh4.5 billion for promotion activities.
“Tourism is on its way to recovery. With improved security we have seen withdrawal of a number of travel advisories,” Rotich said.
The incentive was directed by President Uhuru Kenyatta in January during the launch of English Point Marina resort in Mombasa, where he also promised to waive visa fees for children under the age of 16, to help the country recover from the four-year slump.
Tourism earnings dropped to Sh84.6 billion last year from Sh87.1 billion in 2014, as the sector recorded the lowest number of visitors in five years – 1.1 million visitors from 1.8 million in 2011.
Another winner in the budget is the move by the government to harmonise county taxes, following complains from the private sector of being subjected to a myriad of levies, causing a rise in cost of doing business.
Rotich said most of these levies charged by counties are in violation of the law, while cess charged may have a weak stand in the law.
The government has also proposed to amend the Capital Markets Act to make provision for online trading, which has grown over the time.
The government has also proposed to amend the Capital MarketsAct, to make provision for online trading, which has grown over the time. The government has also proposed to amend the Capital MarketsAct, to make provision for online trading, which has grown over the time.