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Kenya Budget brief 2014 by KPMG

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In 2013, Kenya embarked on radical changes to its governance structure by devolving significant national government functions to 47 county governments. …

In 2013, Kenya embarked on radical changes to its governance structure by devolving significant national government functions to 47 county governments.

The 2014/2015 budget speech presented the Cabinet Secretary for National Treasury with an opportunity to review government performance over the last year and introduce interventions to fine-tune the economy to achieve higher and more equitable growth.
Kenya experienced a real GDP growth rate of 4.7% during the year, a marginal increase over the 4.6% growth in 2012. The growth is largely attributable to strong performance in transport and communication which contributed 15.9% to overall growth compared to 12.9% in 2012. While the contribution of the wholesale, retail trade and agriculture sectors declined when compared to the previous year, they remained significant pillars of growth in 2013. Other sectors which made significant contribution include manufacturing and construction which posted 9.7% and 4.1%, respectively.

The government investment in social services increased by 7.1% from USD 4.3 billion to USD 4.60 billion. 83% of this expenditure was allocated to payment of salaries
for teachers. During the year, the government increased the expenditure on vulnerable persons to cushion them against the rising cost of living the number of households covered increased to 164,000 compared to 49,000 in 2012.

Many businesses are facing difficulties getting skilled labour especially craftsmen jobs due to neglect of technical training institutions and conversion of mid-level colleges into constituent colleges of universities. To address this concern, the government increased investment in youth polytechnics and technical training institutions resulting in an increase in enrollment from 127,000 in 2012 to 148,000 in 2013.

In 2013, over 748,000 jobs were created bringing the total number of persons employed in the formal and informal sector to 13.5 million. 83% of the workers work in the informal sector which is characterized by opacity and limited regulation that makes it difficult to authenticate the employment figures.

Only 32% of the population is employed resulting in a higher dependency ratio which is reflected in the poverty index. With a significant number of people out of employment, the Government is forced to increase spending on health, social security and education. The large number of unemployed youth presents a mob of discontent persons that is available for mobilization and is partly the reason for the sense of social instabilities perceptible in the country.

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  • 1. Kenya 2014 BUDGET BRIEF
  • 2. KPMG BUDGET BRIEF 3 Indicator Kenya Tanzania Uganda Rwanda GDP current prices (USD’ Million) 43,308 30,566 23,631 8,467 Real GDP growth rate (%) – 2014 5.8 7.2 6.5 6.2 Real GDP growth rate (%) – 2013 4.7 7.0 5.6 7.5 Population (Million) 45 49 37 12 GDP per capita (USD) 962 619 642 686 Overall inflation rate (%) 5.0 5.8 5.4 6.8 Treasury bill interest rate (%) 9.5 13.0 11.0 6.0 Budget deficit % of GDP at current prices 9.0 5.5 6.3 2.9 Total public debt (USD million) 19,088 17,874 7,000 2,059 Trade deficit as % of GDP current prices 24.0 15.6 14.0 11.1 Tax revenues (USD million) 11,050 4,066 4,990 2,556 Regional Economic Highlights In a year when the world economy grew by 3.0%, the East African Community countries grew at a combined rate of 6.4% up from 6.1% in 2013. Apart from the Maghreb region which grew at 8.6%, the economic growth in the region was one of the highest globally. The growth is attributable to a stable regional macroeconomic environment with key indicators such as inflation, interest rates and foreign exchange rates remaining stable. Most of the countries have continued to invest heavily in infrastructure with the development of railway lines, seaports, airports, and road networks. Other interventions have focused on key sectors such as agriculture, energy and tourism. These sectors are critical for the creation of employment opportunities for the region’s youth. Tanzania has ploughed millions of dollars into the construction of a port at Bagamoyo while Kenya has entered into a multi-million dollar deal with the Chinese to construct a standard gauge railway line which will run from Mombasa to Nairobi and later to Malaba on the Kenya-Uganda border. Kenya is also in the process of constructing a second port at Lamu as part of a plan to build a second transport corridor from the Kenya coast to Uganda, Ethiopia and South Sudan, largely to export the crude oil from these landlocked countries. The region continues to suffer the impact of the instabilities in Somalia and South Sudan which have led to renewed influx of refugees, terrorism related attacks and a slowdown in the expansion of the regional markets into these two countries. In 2013, the region attracted significant foreign direct investment in the oil and gas sectors following the discoveries of gas in Tanzania and oil in Kenya and Uganda. The region awaits with bated breath the commencement of oil production as it will help to finance much needed development expenditure and cushion the countries against current account and inflation pressures associated with the high cost of petroleum products.
  • 3. KPMG BUDGET BRIEF 4 Kenya Budget Environment Expected gains of devolution: Model of the proposed Machakos City. Sources of GDP growth Contributions to GDP growth (%) Sectors 2012 2013 Agriculture 19.5 13.1 Manufacturing 6.8 9.7 Construction 3.7 4.1 Wholesale and retail trade 21.3 18.1 Transport and communication 12.9 15.9 In 2013, Kenya embarked on radical changes to its governance structure by devolving significant national government functions to 47 county governments. The 2014/2015 budget speech presented the Cabinet Secretary for National Treasury with an opportunity to review government performance over the last year and introduce interventions to fine-tune the economy to achieve higher and more equitable growth. Kenya experienced a real GDP growth rate of 4.7% during the year, a marginal increase over the 4.6% growth in 2012. The growth is largely attributable to strong performance in transport and communication which contributed 15.9% to overall growth compared to 12.9% in 2012. While the contribution of the wholesale, retail trade and agriculture sectors declined when compared to the previous year, they remained significant pillars of growth in 2013. Other sectors which made significant contribution include manufacturing and construction which posted 9.7% and 4.1%, respectively. The government investment in social services increased by 7.1% from USD 4.3 billion to USD 4.60 billion. 83% of this expenditure was allocated to payment of salaries for teachers. During the year, the government increased the expenditure on vulnerable persons to cushion them against the rising cost of living - the number of households covered increased to 164,000 compared to 49,000 in 2012. Many businesses are facing difficulties getting skilled labour especially craftsmen jobs due to neglect of technical training institutions and conversion of mid-level colleges into constituent colleges of universities. To address this concern, the government increased investment in youth polytechnics and technical training institutions resulting in an increase in enrollment from 127,000 in 2012 to 148,000 in 2013. In 2013, over 748,000 jobs were created bringing the total number of persons employed in the formal and informal sector to 13.5 million. 83% of the workers work in the informal sector which is characterized by opacity and limited regulation that makes it difficult to authenticate the employment figures. Only 32% of the population is employed resulting in a higher dependency ratio which is reflected in the poverty index. With a significant number of people out of employment, the Government is forced to increase spending on health, social security and education. The large number of unemployed youth presents a mob of discontent persons that is available for
  • 4. KPMG BUDGET BRIEF 5 Creation of employment remains key focus. Indicator 2011 2012 2013 Real GDP 4.4 4.6 4.7 Inflation 14.0 9.4 5.7 90 day Treasury Bill interest rate 18.3 8.30 9.5 Exchange rate 85.07 86.03 86.31 mobilization and is partly the reason for the sense of social instabilities perceptible in the country. On the macroeconomic front, the key indicators were stable with the annual inflation declining from 9.4% to 5.7%. This is attributable to favourable weather conditions and stability in the petroleum and energy costs. The peaceful conclusion of the 2013 general elections also helped to enhance political and social stability which is critical for a stable macroeconomic environment. While the Central Bank of Kenya maintained continued the reduction of the Central Bank Rate from the high of 18% to 8.50% during the year, the 90 day Treasury Bill interest rate increased to 9.5% from 8.5% the previous year as a result of increase in demand for credit and increased government borrowing to finance the budget deficit. Access to credit continues to be an issue of concern and the government has started exploring ways of reducing interest rates including floating of the Eurobond. The exchange rate remained relatively stable during the year on the back of increased foreign exchange inflows from agriculture, diaspora remittances, investments in oil exploration and the energy sectors. Towards, the end of the year, the Kenya shilling is expected to come under pressure following the slowdown in the tourism sector on the back of travel advisories issued by western governments after security incidents in various parts of the country. The tea sector which is a major foreign exchange earner also experienced significant revenue downfalls towards the end of the year following a glut in the international markets and demand slowdown from traditional markets such as Egypt. Activity at the Nairobi Securities Exchange (NSE) experienced substantial growth with the number of shares traded increasing by 38.7%, making NSE one of the most active exchanges on the continent. The market capitalization grew by 51% to USD 22 billion. This was largely the result of a shift by investors from the debt to the equity market following interest cuts during the year. The only downside was on bonds turnover which declined by 20%. During the year, the Value Added Tax, 2013 was enacted substantially reducing tax exemptions to increase the revenue and slow down the VAT refund accumulations. Despite this, the portfolio of outstanding VAT refunds continues to grow, burdening businesses with significant financing costs as they are forced to seek alternative financing for their operations while the government holds onto their refunds. Over the past three budgets, the government has paid lip service to this problem by promising to tackle the problem without allocating adequate resources. The tax revenues for 2014/2015 are expected to rise to USD 11.7 billion against recurrent expenditure of USD 13.5 billion. Based on the revised estimates for the year, the recurrent expenses have increased by 11.5% while the budgeted development expenditure was revised downwards by 36%. The changes are as a result of a ballooning wage bill and duplication of roles attributed to the ongoing transfer of government functions to the counties. The public debt to GDP ratio increased during the year to about 45% of GDP which leaves some headroom for further borrowing to finance development expenditure. The only risk to the country is the tendency to use debt to finance recurrent expenditure which does not result in productive resources but increases the burden on future generations. In the coming year, the risks facing the government include corruption which continues to be a drain on government resources, insecurity and general disorder, exemplified by terrorist strikes which is a cause of disquiet among investors, social disharmony with the country seemingly in a perpetual campaign mode, poor infrastructure network and inefficiencies in public service. While the country is on course to attain middle income status following the expected rebasing of the GDP statistics this year, addressing these concerns will help the country to return to the Vision 2030 growth trajectory.
  • 5. KPMG BUDGET BRIEF 6 The Budget Highlights Like the 2013/2014 budget, the theme for the 2014/15 budget was economic transformation for shared prosperity making it the first time that the government has retained the same theme over two years. It is therefore no surprise that there few changes to the focus areas for government spending. The budget is based on six critical thematic areas which the government hopes will address concerns raised by Kenyans and help achieve accelerated and inclusive growth. The key themes are: »» Enhancing business environment for job creation by addressing the challenges of insecurity, macroeconomic stability, structural and governance reforms to reduce costs of doing business; »» Improving productivity and competitiveness through investment in modern transport and logistic network. The flagship projects under this theme include construction of the standard gauge railway, an urban commuter railway, modernization of seaports and airports, and expansion of roads, energy and water supplies; »» Easing cost of living and improving welfare of Kenya through agricultural transformation and food security, and support for agro- processing industries to create a foundation for industrial growth; »» Protecting the poor and vulnerable to sustain long-term growth through investment in healthcare services, education and social safety nets in order to reduce the financial burden on households; »» Expanding employment opportunities for youth and women through provision of affordable credit, encouraging entrepreneurship and prioritizing skills development; and »» Strengthening devolution so as to facilitate efficient delivery of services and help counties become the centres of a shared prosperity under Vision 2030. Criminals watch out!
  • 6. KPMG BUDGET BRIEF 7 Unprecedented economic gains expected from standard gauge railway. Security In the wake of recent terrorist attacks which have affected businesses, the government has invested heavily in security with allocations of KShs 66.2 Bn for policing services, KShs 71.3 Bn for Kenya Defense Forces and KShs 17.4 Bn for National Security Intelligence. Key expenditure items include the lease of 2,700 motor vehicles and aircrafts for the police, recruitment and training of 10,000 additional police officers, security equipment upgrade and modernization, Police Medical Insurance and Housing Scheme and installation of a country-wide security surveillance system among other allocations. Transport, Logistics and energy The 2014/15 budget aims to invest in a first class transport and logistic network to reduce the cost of doing business, improve productivity and enhance Kenya’s overall competitiveness. This will be achieved through construction of the standard gauge railway line which is scheduled for completion in 2017, completion of the JKIA commuter rail, commissioning of terminal 4 and Greenfield projects aimed at consolidating JKIA’s position as a regional aviation hub, construction of new 3 new airports at Mandera, Malindi and Suneka, investment in a regional crude oil pipeline and the LAPSSET Corridor Project. The budgetary allocations on road networks amount to KShs 116.7Bn while the energy sector will receive KShs 43.6Bn to expand energy production and lower the cost of energy. Agriculture The government has focused attention on agriculture to increase food production and reduce the cost of living in the country. Due to its significant contribution to the GDP, investments in agriculture provide the best option for the government to achieve equitable growth in the medium term. The key projects in agriculture include KShs 9.5Bn towards ongoing irrigation projects, KShs 3Bn for inputs subsidy, KShs 2.7Bn for strategic grain reserves and KShs 1 Bn for fisheries development. The government is also making investments towards the modernization of the Kenya Meat Commission, rehabilitation of the pyrethrum sector, and establishment of disease free zones. Social Protection and Healthcare The 2014/15 budget includes key proposals aimed at reducing maternal and infant mortality rates as well as dealing with emerging health challenges through facilitation of access to modern and well equipped healthcare facilities and investment in well trained and motivated healthcare workers. The government has allocated KShs 4.7Bn for free access
  • 7. KPMG BUDGET BRIEF 8 Digital promise, the wait continues... to basic and maternal healthcare. Additionally, the government continues to allocate funds to safeguard the poor and vulnerable through Social Safety Nets. To this end, KShs 7.2Bn has been allocated for orphans and vulnerable children, KShs 4.9 Bn for older persons, KShs 1.1Bn for persons with disability and KShs 2.6Bn for rehabilitation of street families, child welfare Society, Presidential Secondary Bursary Scheme and for IDP resettlement. Youth and Women To address unemployment among the youth and women, the 2014/15 budget includes allocations to support ongoing women and youth entrepreneurship initiatives. The key focus is on skills development and access to credit as the drivers of growth and economic creation. To this end, the government has allocated KShs 300M to YEDF, KShs 200M to Uwezo Fund and KShs 200M to WEDF. Further KShs 8.1Bn has been allocated to recruitment and training of 21,870 youth at the NYS, KShs 6.4 Bn for technical training, KShs 5.7 Bn for the higher education loans, KShs 55Bn for university education and KShs 540 M for instructors in village polytechnics. Devolution To ensure success of devolution, the government aims at working closely with the county governments and coordinating the implementation of the development program as well as strengthening public financial public management systems. An amount of KShs 226.7Bn has been allocated to county governments, KShs 3.7Bn equalization fund for basic services to the 14 marginalized counties as identified by the Commission for Revenue Allocation, KShs 28Bn for the Constituency Development Fund and KShs 2.3Bn for affirmative action for social development.
  • 8. KPMG BUDGET BRIEF 9 IncomeTax NSSF Amendments Personal tax The new NSSF Act continues to be a headache. RBA supervisory role enhanced To address the inconsistency between the NSSF Act 2013 and Retirement Benefits Act (RBA Act), accreditation of actuaries and payment of benefits shall be regulated under RBA Act. With the increase in NSSF contributions under the new NSSF Act, strict supervision of the fund should be a good move to ensure the Fund’s noble objectives are met. Remittance of NSSF To align NSSF with other statutory deductions, the monthly NSSF contributions date has been moved from 15th day to 10th day of the month following the month of deduction. This move which may be driven by appointment of the KRA as the NSSF contributions collecting agent, will undoubtedly consolidate payroll operations to facilitate easier regulatory and compliance oversight. The NSSF Act, 2013 had proposed remittances to be made within 30 days but this has now been overtaken by the amendment. Submission NSSF Accounts for audit Under the provisions of the NSSF Act 2013, the Fund was required to prepare its accounts by the sixth month after the end of the financial year. This period has now been reduced to three months. The objective appears to harmonize NSSF Act with the RBA Act although the latter stipulates by the fourth month. Perhaps we might see additional amendments to fully align financial reporting under these Acts.
  • 9. KPMG BUDGET BRIEF 10 Vacation courtesy of the boss. It’s holiday time! As a medium term incentive to protect and boost the tourism sector which is under siege in the wake of insecurity, expenses on vacation trips within Kenya paid by employers for their employees will now be tax allowable on the employer. This amendment to the Income Tax Act to allow vacation expenses will be for a period of 12 months commencing 12 June 2014 to 11 June 2015. Multinationals under the taxman’s radar The Cabinet Secretary intends to review the current definition of a permanent establishment to restrict the transactions between related parties and their local establishments to arms’-length price. Although the Cabinet Secretary did not indicate the specifics of this amendment, it is likely that the change shall be aligned to the OECD definition of a PE that is broader than the current definition contained in the Income Tax Act This measure is aimed at plugging any loopholes that may exist in the current transfer pricing Regulations. Stripping bare businesses In move to enhance transparency and ensure tax compliance, the Cabinet Secretary proposes to amend the Income Tax Act to compel both local and foreign companies to provide the Commissioner with up-to-date information on the changes in their business and corporate structures. The world over, governments are increasingly requiring transparency from organizations tax policies and taxes paid. The move is in line with the proposed OECD Base Erosion and Profit Shifting action plan. The devil is in the detail - Capital GainsTax disguised The prospect of commercially viable oil deposits and rising natural mineral deposits discoveries has spurred the taxman to align taxation of this industry with best international practice. Corporation tax shall now be levied on the net-gain arising from the sale of shares or property in oil and mineral prospecting companies at 30% or 37.5% for resident and non-resident companies respectively. Previously, the sale proceeds were taxed under the withholding tax regime at the rate of 10% and 20% for resident and non-resident companies, respectively. IncomeTax Act -Time-up As part of the on-going tax reforms and modernization of the tax laws, the Cabinet Secretary has proposed to review and amend the current Income Tax Act to benchmark it against best international practices. The amendment Bill will reflect contributions by the various stakeholders in line with the Constitutional requirement for public participation. All-in-one The Government is seeking to introduce a Tax Procedures Bill in 2014 which will contain uniform tax procedures across the Income Tax, Value Added Tax and Excise Duty regimes. These are geared towards easing tax administration as well as reducing the cost of compliance for both KRA and the taxpayers. The provision appears to be in line with the single Tax Appeal Tribunal Act. The upshot of these measures is to enhance tax dispute resolution mechanisms. Corporation tax
  • 10. KPMG BUDGET BRIEF 11 Value AddedTax Attention please! Are we now clear on the VAT Act? Silence is golden but let’s be clear… The Government seems to be keen on ensuring that the reforms initiated on VAT Act 2013 are successfully completed and has now proposed to introduce VAT Regulations which must follow the Constitutional requirement of public participation and the recently enacted Statutory Instruments Act. We expect these Regulations to consolidate the Public Notices that have so far been issued by the Commissioner to facilitate interpretation of the key areas of the VAT Act, 2013. VAT Refunds – the elusive cheque! Once again, the government has promised to act on the VAT refund claims backlog which continues to hurt the private sector and significantly increase financing costs for businesses. Perhaps this view is premised on the Euro-bond that the government expects to float in the 2014/15 financial year. With a good credit rating by Standard & Poor, Kenya expects the bond issue to be a success and taxpayers with VAT refunds may just get that elusive VAT refund cheque! Thou shall sow... The government has shown preference and focus on the agricultural sector with the blanket exemption on import of input for processing and preservation of seeds for planting. This exemption, combined with previous preferential treatment on agricultural inputs will translate to cheaper farm products in the market. Of course, the ultimate prize would have been a zero rating of these inputs but that might just have set the country on the treacherous path of long lists of zero-rated products that precipitated poor revenue performance of VAT as a tax head and the debilitating VAT refund quagmire that we are in.
  • 11. KPMG BUDGET BRIEF 12 Customs and Excise Steeling the economy The Cabinet Secretary has increased the duty rates on the importation of steel and iron from between 0 – 10% to 25%. This is mainly to protect the local manufacturers and drive local production, which is expected to create employment while increasing tax revenues. Breaking bond In a move to facilitate industrial expansion, the Cabinet Secretary has abolished the requirement for custom bonds by importers of refined industrial sugar and wheat. The removal of bonds will ease the cashflow burden and transaction complexities. A Farming nation….. In a move expected to further secure Kenya’s food security, The Cabinet Secretary has exempted agricultural inputs used in the preservation and processing of seeds for planting. This move resonates with government policy intentions to reinstate guaranteed minimum returns for farmers to encourage agricultural production. These inputs previously attracted up to 10% duty on importation. Green energy….plug in! To encourage use of solar and wind generated energy, the Cabinet Secretary abolished the import duty on machinery, spares and inputs for direct and exclusive use in the generation of solar and wind energy. This will complement government efforts to crank up electricity generation to 5,000 MW by 2017 and make PPPs in the energy sector an attractive investment opportunity. These machines and spares previously attracted duty at rate 25%. Summary of duty rate changes Government keen on enhancing food security. Reforming tax administration… Since the coming into force of the East African Community Customs Management Act (EACCMA) in 2005, excise duty in Kenya has been administered under the Customs & Excise Act. In a bid to modernize excise duty administration and align it to international best practice, the government is expected to introduce an Excise Bill, 2014. Continuing with revenue administration reforms, the government has affirmed its intention to introduce the Customs and Border Services Agency Bill. This will go a long way in enhancing customs administration which interfaces heavily with immigration and homeland security. Commodity New rate Old rate Wind & solar energy machines & spares Exempt 0 - 25% Farm inputs - seed preservatives Exempt 0 - 10% Iron and steel 25% 0 – 10%
  • 12. KPMG BUDGET BRIEF 13 Miscellaneous One stop shop! Kenya has for a long time been a preferred investment destination in East Africa. However, the recent insecurity incidents have significantly affected this status. In a bid to consolidate its position as an investment destination, Kenya has embraced the following changes: »» Establishment of Huduma Centers – A state of the art one- stop investment shop and public service center; »» An e-Registry to license small scale businesses within the shortest time-frame; and »» Increase institutional capacity to enhance the war against corruption, economic crimes and recovery of corruptly acquired assets. e-governance: finally it takes off! The government appears keen on reducing corruption especially in public procurement. Recent scandals facing government public procurement processes has seen millions in public funds embezzled. Going forward, all Government procurement will be done electronically to improve transparency in the procurement process and enhance accountability in the use of public funds and by facilitating price comparison, ensure value for money. An electronic procurement system also creates a trail that should facilitate audits. In addition and to ensure efficient service delivery, the government will introduce a Digital Payment Gateway linking payments and service delivery. Ring-fencing insurance risks In a move largely seen to secure the Mwananchi’s future, insurance companies are now required to maintain two separate Policyholders Compensation Funds for life and general business. This will ensure equitable contribution and compensation rates based on the risks associated with each business. Given the recent Insurance Act amendments that require de-mergers of composite insurers, the question is how practical this proposed amendment really is. Plans are also underway for the introduction of a new Insurance Bill. International best practice - keeping pace! The Kenya finance sector continues to grow at an unprecedented rate and the Government is trying to keep pace with the regulatory framework. The Cabinet Secretary has therefore proposed to overhaul the financial sector regulation and introduce a new Bill to establish the Financial Services Authority. This Authority will ensure efficient and effective regulation as well as oversight of the financial sector in line with international best practice. The Central Bank of Kenya Bill is currently under discussion and is expected to align regulation to international best practice and the consolidated financial services sector oversight. Capital Market continued reforms Continued reform of the financial services has gone a notch higher. With the launch of the Capital Markets Authority (CMA) Master Plan for 2014 – 2023, CMA has been commissioned to develop policies and institutional Financial Sector reform continues... reforms. This aims at improving competitiveness of the capital market in Kenya. These reforms should create a platform for more sophisticated products such as futures and commodities trading. De-mutualization of the NSE continues with the gWovernment proposing to reduce its share from 10% to 5%. Reprieve at last? The Cabinet Secretary has proposed to introduce a Kenya Bank Reference Rate (KBRR) and transparent disclosure of the Annual Percentage Rate (APR). APR is a widely used benchmark to assess cost of credit in developed economies and this is set to drive down bank interest rates and is a welcome move to facilitate easy access and affordability of credit. This is also likely to reduce the banks’ non-performing loans portfolio. On the flip side, easily accessible credit channeled to consumer spending could lead to inflation.
  • 13. The budget proposals included in this BudgetBrief may be amended significantly before enactment of the Finance Act. Please note that our interpretation of tax legislation may differ from that of the various Revenue Authorities. Similarly, the content of this BudgetBrief is intended to provide a general guide and should not be regarded as a basis for ascertaining tax liability or as a substitute for professional advice. If you would like specific advice on the contents of this publication, please get in touch with your regular contact at KPMG KPMG International, a Swiss cooperative, is a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. © 2014 KPMG Kenya, a Kenyan Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss cooperative. All rights reserved. Printed in Kenya. Contact us www.kpmg.com/eastafrica KPMG Kenya ABC Towers, 8th Floor Waiyaki way PO Box 40612, 00100 Nairobi, Kenya T: + 254 (0) 20 2806000 F: + 254 (0) 20 2215695 E: info@kpmg.co.ke

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