CS for treasury Henry Rotich[photo/mediamax]The National Treasury has proposed a raft of tax reforms as it seeks funds to finance the landmark Sh2.8 trillion 2018/19 budget that has been heavily aligned to execute the Jubilee administration’s Big Four economic agenda for the next five years.
Most of the measures include the expansion of the tax base in the informal sector, a further raid on lotteries and gaming and overhauling of the Income Tax Act.
On Tuesday, Deputy President William Ruto opened the public sector hearing ahead of the presentation of the Budget Statement to the National Assembly in June. The hearings, which close tomorrow, give the public and interested stakeholders an opportunity to interrogate the budget proposals and give their input.
According to the draft Budget Policy Statement for the 2018/19 financial year, Treasury projects Kenya Revenue Authority will raise Sh1.84 trillion ordinary revenue, including Appropriation –in-Aid, which is 18.9 per cent of the Gross Domestic Product (GDP) up from the expected Sh1.64 trillion (19 per cent of GDP) in the current financial year (2017/18). The rest of the budget will be funded from loans and grants.
The country’s budget in current financial year stands at Sh2.6 trillion. In the next financial year, treasury has projected to incur a deficit financing of Sh630 billion (6.5 per cent of the GDP) up from the current estimated fiscal balance of Sh620 billion.
These Big Four include increasing the contribution of manufacturing sector to the GDP; enhance food security by boosting smallholder productivity and reducing the cost of food; attainment of universal healthcare and provision of low-cost housing.
The Deputy President said the Big Four development agenda is at the heart of the government’s plans to create jobs, address poverty and improve the welfare of Kenyans. “We will focus on addressing the challenges Kenyans are facing through investments that enhance the attainment of desired development objectives,” Ruto said.