The National Assembly has started debating the national budget for this year which is expected to hit Sh2.53 trillion.
To raise the money, the Kenya Revenue Authority (KRA) is expected to collect Sh1.74 trillion, Sh180 billion will come from aid, and grants will contribute Sh47 billion. The government will raise the deficit of Sh562.7 billion through debt.
Caution Against Ambitious Budget
The Members of Parliament have cautioned the National Treasury against excessive borrowing that could negatively impact the country’s growth.
Kenya is already grappling with increasing debt and could further get into trouble to finance a budget of Sh2.53 trillion.
The budget and appropriations committee believes that revenue collection by KRA will decrease GDP by 19 per cent the same way it did in the 2017/2018 financial year.
In addition, 29 per cent of government expenditure will go to repaying debts. Therefore, taxpayers will spend Sh870.6 billion on repaying debts and interests, an amount which has increased by Sh221.2 billion from the previous financial year. This is the equivalent of half of the domestic revenues, an issue that Parliament has raised.
MPs have also recommended reducing zero-rayed products, widening the tax base to cover nil and non-fillers, enhance custom systems, reduce cargo diversion, and increase compliance by tax suppliers.
Government bodies and ministries implicated in corruption scandals have had their budget reduced. For instance, Sh8.25 billion has been cut from the NYS budget, Sh500 million from the Lake Basin Development Authority, and Sh150 million from the Water Resources Management Authority (WARMA).
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