Kenya shs 2.05 trillion budget

[RV Pundit]

• Tweet

Total spending for 2016/17 is set to rise to Ksh 2.05 trillion. This reflects more modest ambitions for spending and a desire to reduce the deficit relative to recent years.
The government expects to collect Ksh 1.50 trillion in revenue.
This will leave a deficit of roughly Ksh 555.4 billion, 6 percent smaller than the revised 2015/16 budgeted deficit.
Infrastructure and energy remains important, but the share of the 2016/17 budget devoted to this sector will dip slightly from 27 to 25 percent.
The share of the budget devoted to governance, justice, and law and order unconditional transfer of funds to the countries (known as the equitable share) is set to rise by 7.9 percent. This is lower than previous years and far below the 15 percent increase proposed by the Commission on Revenue Allocation. Treasury has not explained its use of a lower growth rate.
Despite the public being invited to comment on the draft Budget Policy Statement in February, the final statement does not indicate how public input was taken into account or how it influenced the budget. This could imply that input from the public was not satisfactorily considered.

[Empedocles]

Total spending for 2016/17 is set to rise to Ksh 2.05 trillion. This reflects more modest ambitions for spending and a desire to reduce the deficit relative to recent years.
The government expects to collect Ksh 1.50 trillion in revenue.
This will leave a deficit of roughly Ksh 555.4 billion, 6 percent smaller than the revised 2015/16 budgeted deficit.
Infrastructure and energy remains important, but the share of the 2016/17 budget devoted to this sector will dip slightly from 27 to 25 percent.
The share of the budget devoted to governance, justice, and law and order unconditional transfer of funds to the countries (known as the equitable share) is set to rise by 7.9 percent. This is lower than previous years and far below the 15 percent increase proposed by the Commission on Revenue Allocation. Treasury has not explained its use of a lower growth rate.
Despite the public being invited to comment on the draft Budget Policy Statement in February, the final statement does not indicate how public input was taken into account or how it influenced the budget. This could imply that input from the public was not satisfactorily considered.

Collecting 1.50 trillion is going to be a neat trick.

- KRA collected a total of Sh888.1 billion in the 10 months to April against a target Sh1.215 trillion for the financial year.

- With only two months to the June 30 end of the current financial year, the taxman is likely to miss its full-year tax collection target given the shortfall of Sh327 billion or a monthly average of Sh163.5 billion.

http://www.businessdailyafrica.com/KRA-s-tough-call-of-raising-Sh327bn-in-two-months-to-June/-/539546/3225554/-/q52w2i/-/index.html

And we're also heading into the elections next year, when government austerity typically goes out the window and business slows down (reduced tax collection).

[RV Pundit]

KRA need to be reformed. They certainly can collect more than tax if they can deal with corruption.

I am suprised they are collecting mere 88b per month on average.

I think on April they collected a record 132B --I bet this was due to crackdown of tax evasion & new tax enforcement team -or maybe companies like Safaricom booking their profit tax at KRA?
http://allafrica.com/stories/201605180497.html

If they were to collect similar amounts for 2 months..that will leave shorft fall of 57b!!

Uhuru should fire the entire KRA management if they don't meet the targets. No iffs. No butts. If they beat the targets they should also be awarded huge bonus..am sure if every employee is given 1m shs bonus on average...that is mere 3Bshs for 3,000 strong KRA ....and these guys don't have to hopefully steal.

[RV Pundit]

Actually according to this story..the total collected upto april is 975...leaving a shorfall of 230B...which KRA can easily collect in May & June. If we can reform KRA and expand the tax base...there is no reason why it cannot collect 2-3 trillion shs. South Africa and such places collect about 25% of their GDP...we are still collecting anything btw 17-21% of our GDP--if my memory is correct.
http://allafrica.com/stories/201605180497.html

[RV Pundit]

[Empedocles]

@RV Pundit,

Thanks for the link. I hadn't seen that.

But the problem still remains; the article I linked to is dated 30th May and quotes the gazetted figures from KRA up to and including April 2016.

So where does the figure of Sh974.5 billion given in the Allafrica (Capital FM Source) link come from, seeing that both articles are writing about the same time period (end April 2016)?

Here's the extract from the Kenya Gazette:



Page 27--> http://kenyalaw.org/kenya_gazette/gazette/download/Kenya_Gazette_Vol.CXVIII_-_No_._57_.pdf

The shortfall of Sh327bn is after the profit booking from companies like the banks, Safaricom, etc. with two months to go.

KRA is averaging Sh88bn per month.

[RV Pundit]

Certainly there is confusion. But why would treasury think they can collect 1.5trillion if the shortfall is that big. If I seem to recall...over the last few yrs..KRA has been collecting on average..about 90%..of their estimates.

@RV Pundit,

Thanks for the link. I hadn't seen that.

But the problem still remains; the article I linked to is dated 30th May and quotes the gazetted figures from KRA up to and including April 2016.

So where does the figure of Sh974.5 billion given in the Allafrica (Capital FM Source) link come from, seeing that both articles are writing about the same time period (end April 2016)?

Here's the extract from the Kenya Gazette:



Page 27--> http://kenyalaw.org/kenya_gazette/gazette/download/Kenya_Gazette_Vol.CXVIII_-_No_._57_.pdf

The shortfall of Sh327bn is after the profit booking from companies like the banks, Safaricom, etc. with two months to go.

KRA is averaging Sh88bn per month.

[RV Pundit]

Here is another link claiming KRA had collected more than 1trillion by April 16th. It therefore would seem they will be very close to 1.2 trillion target.
http://www.mygov.go.ke/?p=9653

.

[yulemsee]

Here is another link claiming KRA had collected more than 1trillion by April 16th. It therefore would seem they will be very close to 1.2 trillion target.
http://www.mygov.go.ke/?p=9653

.

This one includes both exchequer revenue which is mostly taxes plus other monies collected by ministries e.g driving licences called A.I.A

[RV Pundit]

Thanks. Yeah. That would be not part of the budgeted taxes..but part of A.I.A. I guess we have to wait for end of June so we can know by how much KRA will miss their target. They certainly look like they'll miss it.

This one includes both exchequer revenue which is mostly taxes plus other monies collected by ministries e.g driving licences called A.I.A

[Real P]

Uganda chose the Tanzania route, saying it was cheaper, had more access infrastructure, and presented fewer complications in securing land for it.

http://mgafrica.com/article/2016-05-16-first-uganda-opted-for-tanzania-pipeline-now-rwanda-abandons-kenya-sgr-rail-route-picks-dar-es-salaam

[hk]

Thanks. Yeah. That would be not part of the budgeted taxes..but part of A.I.A. I guess we have to wait for end of June so we can know by how much KRA will miss their target. They certainly look like they'll miss it.

This one includes both exchequer revenue which is mostly taxes plus other monies collected by ministries e.g driving licences called A.I.A

We keep setting this huge budgets yet every year we don't absorb all the funds allocated. I am not sure we have increased capacity to absorb all those funds . Over allocation is what led to NYS scandal. On another note kra is increasingly collect more money especially from land lords. The 10% gross of rent collected is yielding more taxes as more landlords opt for paying a monthly instead of annual or quarter and having to deal with auditors inserting or kind of deductions. Kra would collect more if the government paid suppliers and contractor on time.

[RV Pundit]

Yeah NYS and Judiciary showed us what sudden increment of funds without capacity building will results into. I think we are not doing badly though now considering counties/capitation for schools/cdf are spending their money and putting treasury in considerable strains.  And then there is question of pending bills...esp in road sector...when other ministry have a problem spending their money. Maybe Budget controller and treasury should be allow to vary the budges with parliament approval every few months. Right now..they can only do this thro suplimentary budget..which come in too late.

For now...our budget plans...are been translated to reality.

We keep setting this huge budgets yet every year we don't absorb all the funds allocated. I am not sure we have increased capacity to absorb all those funds . Over allocation is what led to NYS scandal. On another note kra is increasingly collect more money especially from land lords. The 10% gross of rent collected is yielding more taxes as more landlords opt for paying a monthly instead of annual or quarter and having to deal with auditors inserting or kind of deductions. Kra would collect more if the government paid suppliers and contractor on time.