Suppliers of goods and services to the National Government will now receive payments within a maximum of 60 days. The Cabinet Secretary for National Treasury Henry Rotich made the announcement during the budget reading process.
There have been numerous complaints by suppliers about delayed payments by the government. A report by the Star newspaper estimates that the national government and county governments jointly owe suppliers KSh400 billion in unpaid bills. The World Bank Economic Update released in April showed that profitability in businesses that supply to the government has been on the decline.
Henry Rotich said that they have set aside KSh10.9 billion to settle the pending bills owed to the businesses. The CS proposed a change to the Competition Act to empower the Competition Authority to punish entities that fail to pay suppliers on time.
The National Treasury official also revealed the consolidation of the three funds that support youth, women, and persons with disability. Uwezo Fund, Youth Enterprise Development Fund, and Women Enterprise Development Fund will now operate under one entity known as the Biashara Kenya Fund. Mr Rotich said that the consolidation was necessary to increase efficiency and eliminate overlaps.
Youths registered under the Ajira Digital Program will be exempted from paying income tax for three years with effect from 1st January 2020. Instead, they will pay a registration fee of KSh10,000 that will be used to fund the program.
