Logging companies and banks will be paying more taxes in 2023 as the government sets its sights on increasing tax revenue.
Treasurer Minister, Ian Ling-Stuckey has announced an additional 20 percent increase in log export taxes as well as an increase in a tax on the banking sector from 30 percent to 45 percent.
He made the announcement in parliament when he tabled the K24 billion 2023 budget.
The tax on loggers builds on existing efforts to stop log exports by 2025 and encourage downstream processing in the country.
In 2020, the government imposed a 50 percent tax on round log exports. In 2023, an additional 20 percent will be added on, bringing the total to 70 percent. The Treasurer said the K30 million generated from this tax will be used to support the UN-backed trust fund.
Banks, meanwhile, have been hit with a 45 percent tax – a 15 percent increase expected to generate K240 million for the government purse.
While the banking sector is yet to respond to the announcements from a profits standpoint, the most obvious long-term impact will be on superfunds whose members’ contributions will be affected.
Superfunds that own shares in banks like BSP will likely see a dip in dividend payments in the next financial year.
Household Support
In January, the minimum tax-free threshold will be increased from K13,000 to K20,000 and the fuel excise suspended for six months until June. This means minimum wage earners earning a maximum of K20,000 will not pay income tax.
Police and Justice Sector
The law and justice sector will see funding increases in 2023. The government has allocated K401 million for the police, the judiciary, and other related sectors. The funding will support the increase in police numbers from 5000 to 7000 in 2026.
Infrastructure
More than K4 billion has been earmarked for infrastructure development with K960 million primarily for district infrastructure alone.
Health and Education
Health and education will also see increases next year with the treasurer indicating more support for frontline workers.
Agriculture and Economic
With the creation of new ministries, the National Government will increase funding for the economic sector from K71.8 million to K983.9 million.
This will see additional funding given to the commodity boards as well as a K2.61 million funding for the new Livestock and Development Corporation.
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