- Treasury CS Yattani said the move will help the government avoid making decisions based on false assumptions
- The acting exchequer boss added the measure will go along way in helping Kenya Revenue Authority (KRA) set achievable targets
- KRA, which targets to net about KSh 1.9 trillion this fiscal year, will see its revenue collection target significantly reduced
The government has readjusted its 2019-2020 national budget by KSh 131 billion amid fears that the taxman will once again fail to hit its revenue target this fiscal year.
Speaking on Friday, October 25, Treasury Acting Cabinet Secretary Ukur Yattani described the measure as painful and unavoidable.
READ ALSO: 6 prominent persons sharing same birthday date with Uhuru Kenyatta
READ ALSO: Drama as dock workers find man locked inside empty container at Nairobi SGR depot
According to Yattani, the move was aimed at making the government operate under a reasonable budget and also enable it to set achievable tax targets.
"To avoid making budgets based on false assumptions, this time we have decided to be realistic. We have come up with those hostile measures. It is painful but unavoidable. We have no other option," the CS said.READ ALSO: Aden Duale tells off Mt Kenya leaders opposed to Uhuru, Raila-led referendum push
Yattani's remarks came as it emerges that in the first quarter of this financial year, KRA netted KSh 410.5 billion in total Cumulative Revenue against the target of KSh 495 billion. This reflected a shortfall of KSh 84.6 billion.
In Ordinary Revenue collection, KRA fell behind its KSh 444.5 billion target by KSh 60.2 billion after it collected only KSh 384 billion.
READ ALSO: Credit transfer to degrees via life and work experience
In the 2019/2020 financial year, the government is expected to collect at least KSh 1.9 trillion as part of the money it will inject in financing its KSh 3 trillion budget.
The CS, however, revealed the tax target will also be slashed down by up to KSh 91 billion.
Out of this amount, KSh 25.3 billion will be reduced from Ordinary Revenue target and KSh 66 billion from other sources of government income.
This comes at a time when there are concerns about the ballooning public debt which currently stands at about KSh 6 trillion.
READ ALSO: Ruto: BBI haitasambaratisha Jubilee, tuko nyuma ya Rais Kenyatt
The National Assembly had voted to increase the debt ceiling to KSh 9 trillion, a move Yattani appeared to support but which has since been contested by Senate.
Yattani argued the country may suffer financially if it does not seek financial aid from lenders.
“I really want you to accept that this is the best proposal for this country. You will still be enforcing the borrowing through the annual budget, this is just a palliative. It will give us an opportunity to handle these expensive loans,” the CS said.Do you have a groundbreaking story you would like us to publish? Please reach us through news@tuko.co.ke or WhatsApp: 0732482690. Contact Tuko.co.ke instantly.
One night stand left me HIV Positive-Naomi Ireri | Tuko TV.
Subscribe to watch new videosSource: TUKO.co.ke
ncG1vNJzZmivp6x7tcHKqGWcp16gsnB%2FkWppcmtdp7K3sc2unGabn6G5pq%2FToqanZaOdvLPAxZqjpWWWpL%2BksdJmnqiupGLAra3SoWRraGFuenN8kWlkm62UnLK1ecGyZKSrmGJ%2BdH2Mm6ClpJmku2%2B006aj