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Archive for June 10th, 2011

Police rescue lecturer from abductors, arrest five

Posted by Administrator on June 10, 2011

By Karanja  Njoroge

A lecturer at Egerton University who has been missing for the last five days after being kidnapped was rescued by police.

Police stormed the house in Teachers Estate in Nakuru where the abductors were holding Mrs Jackbeth Ng’ang’a and rescued her.

The abductors were demanding a Sh3 million ransom from her family. Five suspects including two women were arrested during the rescue operation.

Rift Valley Provincial Police Officer Francis Munyambu said a toy pistol, bows and arrows were among items recovered from the house.

The gang, which abducted the lecturer on Sunday from her house at Mwariki Estate, has been calling the family demanding for the money before they could release her.

The lecturer was kidnapped moments after she returned home from a church service.

“She returned home to find the gate which is usually locked open,” the PPO said. Her husband, Dr Fredrick Mugo Ng’ang’a, was roughed up by the thugs who ushered him into his compound during the incident.

The abductors who wore masks to conceal their identity were young men aged between 18 and 35.

“When her husband who had been roughed up by the abductors and lost consciousness came to his senses, he reported the matter to police who immediately started investigating,” said Mr Munyambu.

Sources indicated that detectives used technological gadgets to track down the kidnappers to their hideout. They have been calling the family using different mobile phone lines demanding for the ransom.

Security agents who believed the lecturer was being held in a place within Nakuru have for the last four days been combing various estates in the town looking for her.

However, Munyambu said the lecturer was rescued through the assistance of the public.

“We are very happy with the role the public has played in assisting us apprehend the suspects,” he said.

Relatives, colleagues and friends of the lecturer gathered at the family home at Mwariki Estate to celebrate the reunion.

Source: http://www.standardmedia.co.ke/InsidePage.php?id=2000036885&cid=4&ttl=Police rescue lecturer from abductors, arrest five

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From a banking career, one woman has found her niche in multi-level marketing

Posted by Administrator on June 10, 2011

Ms Joyce Waweru chose a career in marketing. Fredrick Onyango

Ms Joyce Waweru chose a career in marketing. Fredrick Onyango

Few people would drop from a banking career at the Central Bank of Kenya to move into multi-level marketing popularly known as network marketing. But Joyce Waweru did.

Today, besides taking a commanding lead in the industry, she is also the director of Change Speak limited, a company that is involved in mentoring young people in career choice.

An established marketer and distributor at Tiens Health Product Kenya Limited, a locally operating Chinese company specialising in wellness and personal care products, Waweru ventured into marketing by chance. She was  looking for a more “interesting” career outside banking.

“I went into marketing school to enhance the talent I had with ease. Marketing has become my career and my life. I am good at it no doubt. Talking and showing a customer a product he already needs to a point he makes a purchase is my job,” she said.

Today, Ms Waweru boasts of 15,000 marketers she has brought into the marketing chain for the company products across the East Africa region, out of whose sales volume part of the commission is paid to her in addition to incomes from her personal sales.

Dream come true

Her radiant smile is enough evidence that hers is a dream come true. It is a reflection of a discovered fulfilling career, thanks to a marketer at Tiens Limited who she met on one evening while out for coffee and introduced her to the multi-level marketing model.

It is a career she is keen to build, if her more than Sh400,000 worth personal library of books and video clips detailing marketing and personal development concepts is anything to go by.

Within a period of close to a decade that she has worked for Tiens, she says she and her network of marketers have been able to bring in business worth over a million dollars.

And this  business is not only sourced from Kenya but for four years now she has constantly travelled to Ethiopia to sell the wellness products. Other countries that constitute her markets are Uganda, Tanzania and the recently established South Sudan. Her mission is to do away with the notion that marketing is for jobless people; efforts she has been able to achieve going by her past performance. But looking back at Kenya, it is not a situation that brings smiles to her as her fat paycheque would do.

“Despite Kenya having the best tax laws that favour incomes from commissions, there has not been a corresponding positive perception of marketing. The numbers of jobless people keep soaring whereas there are opportunities in marketing lying all over waiting to be discovered,” she said.

Commissions

Commissions are taxed less than salaried incomes. It is an opportunity that has raised incomes for Ms Waweru and others in that line as world over most such taxes rarely exceed 5 percent of the total income from commissions.

“Young people in Kenya are not as aggressive marketers as their peers in the region,” she said. In her view, such countries as Sudan and Ethiopia have young people who are keen to build careers on a home-based working model that is gaining popularity in the developed world where the race for independent entrepreneurial skills is at its peak.  It is a similar model that is applied in multi-level marketing as all one needs is a brain, communication skills, a network of clients and the products on sale.

Unlike any other business that would call for huge capital and most probably attract rent expenses, all she required was Sh1,500. This was the registration fees to join the company’s list of distributors.

Several factors drove Ms Waweru into choosing a career in marketing. First, the flexible working schedules that have been made possible by network marketing which is purely based on appointments.

Then, the fact that it is an almost monetary free investment coupled with the fact that it is less threatened by technology as has been the case in other careers where most human roles have been replaced by computer systems.

“Whenever you have a new product, you will most definitely require marketing for it especially where the market is competitive,” she added.
In search of cheap options to marketing, most companies have turned to multi-level marketing. It is a model that has proven quite successful judging by the number of companies that are expanding their branches and rely on this type of marketing. Locally, companies popular for using this model have been those in the wellness and personal care products such as GNLD, recently launched BF Suma and beauty products company Oriflame among many others.

With a keen eye for various cultural settings, political and economic regulations present in various countries, Ms Waweru has no doubt that is the recipe for a successful approach in marketing across countries.

Expansion

In Tanzania for instance, the impact of socialism as introduced by the country’s first president is still felt in social settings, she views it as an opportunity to introduce the network marketing as socialism makes networking easier.

In Sudan, where she ventured most recently, she says that patiently learning the social and cultural systems has come in handy to design the right approach to marketing in this region.

“How liberal you are in your home country is not the same way that others are. You should take time to study and respect other people’s ways of life if you want them to be your customers,” she said. With corporate Kenya eyeing South Sudan for expansion plans, Ms Waweru sees extended opportunities for herself  and others who will develop the right marketing approaches to suit this new frontier.

ikarambu@ke.nationmedia.com

Source: http://www.businessdailyafrica.com/-/539444/1177798/-/122hbbiz/-/index.html

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New taxes hit low income beer drinkers and smokers hardest

Posted by Administrator on June 10, 2011

A man buys beer in a Nairobi supermarket. The increase in tax charged on alcohol and cigarettes will make it more likely for poor people to turn to illicit, and often dangerous, alcoholic drinks. File

A man buys beer in a Nairobi supermarket. The increase in tax charged on alcohol and cigarettes will make it more likely for poor people to turn to illicit, and often dangerous, alcoholic drinks. File

The full impact of the tax measures that Finance minister Uhuru Kenyatta proposed in his Budget speech became clear yesterday with the discovery by low income earners that he had made it more expensive for them to drink and smoke even as he made food and energy more affordable.

Though Mr Kenyatta’s decision to impose a uniform ‘sin tax’ on all beer and cigarette brands will enable the taxman to collect his dues from cigarette and alcohol manufacturers more efficiently, its full impact was a general rise in prices that were most significant at the bottom end of the market.

Kenya’s largest beer maker, East African Breweries, said that although Mr Kenyatta had good ground to seek a harmonisation of the tax rate, he had set the threshold at a level that would culminate into a dramatic increase in retail prices.

“We would have preferred a lower rate of harmonisation as this amounts to a dramatic increase in prices of beer, including the non-malted brands such as Pilsner, Allsops and Citizen,” said EABL head of corporate relations Brenda Mbathi.

And Ms Tabitha Karanja, the managing director of the Naivasha-based beer maker, Keroche, said: “I thought the excise tax at Sh65 a litre was already too high and my fear is that it might push consumers to illicit drinks”.

The taxman hopes to collect an additional Sh10 billion in excise taxes after applying the new measures on all beers, cider and cigarettes.

The sin industry was yesterday still struggling to measure the likely impact of the measures on their revenues even as all signs pointed to a looming earnings drought as consumers of low-cost brands  migrate to the cheap and often more dangerous drinks and cigarettes.

Mr Kenyatta imposed a fixed tax of Sh70 or 40 per cent a litre on beer, raising by margins of at least Sh5 (or Sh2.50 a bottle) from previous Sh65.

The tax measures were particularly hard non-malt beers, a growing segment of alcoholic drink market that mainly targets low-income Kenyans, and where prices jumped by higher margins of Sh15.

Wines tax rose by Sh10 a litre with the alternative tax that stood at 35 per cent rising to 40 per cent.

Beer and cigarette makers gave varied views but none appeared entirely comfortable with single-tier taxes in their respective industries.

Ms Karanja said she expected the price of lager to rise by up Sh5 per bottle. EABL said it expected the Sh5 tax adjustment to cover for the impact of inflation on its business, adding that the beer maker would adjust its ex-factory price to reflect the new measures.

Cigarette makers faced similar pricing challenges after Mr Kenyatta slapped the industry with a uniform tax of 1,200 per mille (a thousand cigarettes) or 35 per of the retail price.

The move is expected to push up prices of popular cigarette brands like Rosters, Rocket Supermatch and Sportsman.

What the blend of specific (based on measurement) and ad valorem taxes (calculated on price) for the sin industry means is that a reduction of ex-factory prices by manufacturers will not lessen their tax burden.

It means the taxman will always be the biggest beneficiary of upward adjustment of prices by manufacturers.

Although the minister did not spell out the revenue implications of the tax harmonisation, a senior Kenya Revenue Authority official confirmed almost all the budgeted increases in excise tax revenue would come from cigarettes, beer and wine.

Mr Francis Kamau, a senior tax manager with consultancy Ernst & Young, said: “Harmonising beer and cigarette taxes is a model that has been borrowed from Egypt and we are still trying to understand its possible impact on government revenues.”

Revenue estimates released on Wednesday indicated that total excise collection would rise from Sh83.8 billion collected last year to Sh93.3 billion helped by expected improvements in beer, wine, cigarette and cider markets.

The most interesting aspect of the tax measures is in the cigarette market where a uniform tax regime means disbandment of the traditional four tax bands. This is expected to culminate in a significant increase in the prices of bottom-end of market products even as the cost of premium brands falls.

The move is in line with the World Health Organisation (WHO) and the Ministry of Health’s recent drive to discourage smoking.

“The proposed regime will reduce incentives for substitution among different brands, in line with the public health objective of reducing tobacco consumption,” said Mr Kenyatta.

Previously, four bands factored in whether products were soft or hard cap, filter or non-filter and based on value.

Reducing revenues

Apart from smokers hopping from one brand to the next, WHO said manufacturers would shift to convenient bands through price manipulation, reducing government revenues.

“This means the minister has increased the price of non-filter and low-priced cigarettes and the poor fellow will go for kiraiku (traditional rolled tobacco),” said Mastermind Tobacco communications chief Josh Kirimania.

The move came in the backdrop of the December 2010 amendments to the Financial Act by the Parliamentary Finance Committee that resulted in what has been estimated at billions in tax loss.

Last December, the committee amended the Act to eliminate an earlier inclusion of cigarette length as a tax determinant which would have placed Mastermind’s Supermatch and BAT Sportsman at same tax level.

BAT in reaction reduced its price from Sh95 to Sh70, shifting the brand from its traditional class C to Supermatch’s less taxed B, causing a major revenue loss to both BAT and the taxman—estimated at billions in excise tax alone.

mwahome@ke.nationmedia.com

Source: http://www.businessdailyafrica.com/Corporate+News/-/539550/1177988/-/rp5iy2/-/index.html

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Uhuru to Go After Tax Evaders to Fund Sh1.1 Trillion Budget

Posted by Administrator on June 10, 2011

Finance minister Uhuru Kenyatta yesterday walked a tightrope while presenting his Budget for 2011/12.


He had to fund increased government spending of Sh1.15 trillion while minimising the burden on Kenyans already reeling from difficult economic times.

In his delicate balancing act, he removed one nuisance from ordinary employees who only have one source of income by exempting them from the annual ritual of making annual tax returns and leaving the duty of filing PAYE returns to employers.

The budget maintained Value Added Tax at 16 percent pending the outcome of an ongoing review of the VAT regime.

Uhuru presented what is Kenya’s biggest budget yet focusing on food security, implementation of the new constitution and improvement of infrastructure as well as constituency development.

However he has a huge deficit to bridge.

With total expected receipts of Sh970.7 billion (including loans and grants), and total expenditures at Sh1.15 trillion, Uhuru is facing a deficit of Sh184.3 billion.

Uhuru allocated some Sh20 billion for implementing the new constitution; increased allocation to Constituency Development Funds to Sh17.2 billion; and provided close to Sh5 billion to constituencies under other votes.

Some Sh4.2 billion will be used to resettle the IDPs and Mau Forest evictees while Sh5 billion has been set aside for the 2012 general election.

“These measures are intended to promote economic growth, expand employment opportunities, reduce poverty, cushion our people against high commodity prices and simplify the tax system,” Uhuru said releasing the budget called “Building Resilience and Sustaining Inclusive Growth for a Prosperous Kenya.”

Faced with a shrinking tax collection base, Uhuru said he would increase withholding tax for consultants from 5 per cent to 10 per cent.

“It is the obligation for every person to pay his or her fair share of tax. However, it has been noted that some professionals are not paying taxes in accordance with their income,” he said.

In a move that will increase prices of the cheaper cigarettes and decrease the prices of the premium brands, Uhuru proposed to harmonise the excise duty regime for cigarettes at Sh1,200 per mille (1,000 sticks) or 35 per cent of the retail selling price, whichever is higher.

“The proposed regime will reduce incentives for substitution among different brands, in line with the public health objective of reducing tobacco consumption,” Uhuru said.

Jullie Owino, the BAT spokesperson, said they welcomed the move but were yet to calculate by how prices will increase. But Mastermind warned the move was counterproductive to the poor. “This is very bad message for the low income people,” said Mastermind’s spokesman Josh Kirimania.

Uhuru said he intends to harmonise the rates for beer at Sh70 per litre or 40 per cent of the retail selling price, whichever is higher.

“This will also address administrative challenges emanating from misclassification to reduce tax liability,” he said.

Tabitha Karanja, MD of Keroche Breweries, said the price of a beer will go up by not less than Sh5 as a result.

Uhuru abolished the filing of tax returns by employees who have no other income apart from their salary. The minister said the move would reduce unnecessary filing of tax returns as the Pay As You Earn taxes have already been paid by employers.

If you have not applied for a Personal Identification Number and have been frustrating Kenya Revenue Authority, the minister has proposed to amend the Income Tax Act to give the KRA commissioner powers to unilaterally register such taxpayers.

The minister said the law will be amended to allow Kenya to enter into Tax Information Exchange Agreements with other countries.

“Following recent financial crisis, it is important that countries safeguard their revenue base through sharing and coordination of tax information to avoid tax evasion,” he said.

Uhuru said, “all measures I am proposing herein and for which their effective date is immediate shall come in effect midnight tonight.”

To cushion the masses from high food and fuel prices, the minister said he was removing the import duty on maize for six months as well as the duty on imported wheat for one year starting.

Due to limited rice production, Uhuru said he would allow the importation of rice at 35 per cent duty instead of 75 per cent for one year.

And to ease the burden of high fuel prices, Uhuru proposed to completely remove excise duty on kerosene. And though taxes on petrol were not touched, a 25 per cent reduction on exercise duty on diesel was maintained.

He also cut import duty on food supplements from 25 per cent to 10 per cent and scrapped import duty on imported motorcycle ambulances.

For dairy farmers, the duty on imported animal feeds was reduced from 10 per cent to zero.

Buses used to ferry people at airports will be exempted from duty.

Security needs to be beefed up and therefore bomb detectors and CCTV cameras were exempted from import duty.

Source: www.nairobistar.com

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