KRA must work hard to meet budget targets, says Rotich

Wednesday March 2 2016

National Treasury Cabinet Secretary Henry Rotich (right) and Principal Secretary Kamau Thugge before the Liaison Committee of the National Assembly at County Hall in Nairobi on March 1, 2016. PHOTO | ROBERT NGUGI | NATION MEDIA GROUP

National Treasury Cabinet Secretary Henry Rotich (right) and Principal Secretary Kamau Thugge before the Liaison Committee of the National Assembly at County Hall in Nairobi on March 1, 2016. PHOTO | ROBERT NGUGI | NATION MEDIA GROUP 

By JOHN NGIRACHU
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The Kenya Revenue Authority will be under pressure to raise Sh1.3 trillion while the government will limit spending to meet its targets in the Budget for the coming financial year, Treasury Cabinet Secretary Henry Rotich has told MPs.

Mr Rotich told the National Assembly’s Liaison Committee that Treasury is “very cautious” because targets have not been met in the past two years.

“On the Sh1.3 trillion, that is the much we can do. The only way we can go above that is to raise taxes and that is not something we want to do. The KRA must work hard to ensure that is achieved,” Mr Rotich told the committee chaired by Deputy Speaker Joyce Laboso.

He said the ministry would focus on four key areas — mandatory expenses such as payment of debts and salaries, ongoing projects, areas where it needs to contribute money to unlock donor-funded projects and what it considers strategic policy interventions.

About 95 per cent of the Budget would be funded from revenue collection, said the Cabinet Secretary, and the little left over would be used for development, with the government being careful to keep borrowing to a minimum.

Currently, 29 per cent of the revenue collected goes to servicing Kenya’s debts. 

“We have to put more pressure on KRA. They have to expand the base and ensure there are no leakages. The more we collect, the more we can finance pressing needs,” said Mr Rotich.

But the MPs described his Budget Policy Statement as unrealistic, with most saying the government has about 1,000 ongoing projects that would need Sh3 trillion over the next eight-and-a-half years to complete.