New Sh2.97trillion budget plan signals higher taxation for Kenyans.

From July, the Treasury intends to lift ordinary revenue to an additional Sh 194 billion.

As the country faces tough economic times, the higher budget goal, accompanied with cuts in borrowing, is expected to bring pressure on KRA to boost collection efficiency.

The budget provides the Executive with Sh1.922 trillion, 65.3 percent of the overall budget. Additionally, the Parliament and Judiciary will collect Sh37.88 billion and Sh17.92 billion.

Increased Revenue, higher taxation.

Cabinet Secretary Ukuru Yatani has signalled further taxes in the next fiscal year. This results from raising the budget by 3.2% to Sh2.97 trillion. However, the budget increase cuts borrowing for the first time in four years.

Mr. Yatani’s spending plan aims to inject Sh1,975 trillion into recurring expenditure and this is between July 2021 and June 2022. And Sh611 billion would be raised from development projects.

The Treasury projects ounties’ expenditure at Sh377.63 billion,  with an additional Sh5 billion going to the contingency fund. The Treasury has indicated priority for the completion of ongoing projects, with tighter approvals for new ones to reduce budgetary pressure and waste.

The government will continue to implement its expenditure prioritization strategy in the medium term. This is with a view to achieving the transformative development agenda.  

The government’s agenda is focused on the provision of core services, ensuring equity and minimizing costs. The government is meant to achieve this agenda by removing duplication and inefficiencies, creating job opportunities and improving the general welfare of the citizens.

According to the BPS draft, the Treasury notes that it intends to increase ordinary revenue by an additional Sh 194 billion. This revenue increase is what signals deeper taxation for Kenyans beginning July. 

Widening the tax net and sealing tax revenue leakages will be an alternative to tax rises.

Sourced from Business Daily