Economy
KRA protests the Sh3bn budget cut over steeper tax targets
Friday, May 19, 2023
Times Tower in Nairobi, headquarters of the Kenya Revenue Authority. file image | Denis Onsongo | NMG
The Kenya Revenue Authority (KRA) has protested the Sh3 billion budget cut at a time when the government has boosted its targets to meet a Sh3.6 trillion budget in the year starting in July.
This comes after the Treasury cut its budget to Sh23.7 billion for the 2023/24 financial year, down from Sh26.3 billion earmarked for the current financial year.
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Acting Commissioner-General Nancy Ngtic told MPs that “the earmarked funding comes to a total funding rate of 0.83 percent for recurrence, which is lower than the total national treasury funding in FY2022/23 of 1.11 percent.”
Ms Ngetic said the total KRA expenditure provided to the national treasury amounted to Sh57.4 billion or a funding rate of 2% to enable the excise tax to carry out its mission of collecting revenue to fund the 2023/24 budget.
She explained that the total deficit against the budget submitted to the treasury last January, excluding projects funded by donors, amounted to 34.54 billion shillings, of which 31.45 billion shillings are recurring and developmental (3.02 billion shekels).
The KRA requires that taxes be funded up to two percent of the target annual revenue collection, which is set at Sh3.033 trillion next year.
Ms Ngetich said the KRA requires Sh7.9 billion to comprehensively implement revenue mobilization programs and activities to achieve the required revenue growth for fiscal year 2023/24 of Sh504 billion and the target of Sh3.033 trillion.
It said the money would go towards field operations such as compliance, auditing, intelligence, investigations, enforcement, transportation, scanners, maintenance of electronic seals, staff training and capacity building, among others.
“Inadequate funding jeopardizes the achievement of the revenue targets set. Of great importance is the need for an additional 24 scanners for critical entry/exit points at a cost of Sh2.13 billion through leasing,” said Ms Ngetich.
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Appearing before the Finance Committee to present the KRA’s 2023/24 budget proposals, Ms Ngetich said no budget funding is required for additional scan tools for Isebania, Namanga, Loitoktok, Taveta, Lungalunga, Lwakhakha, Suam, Harissa, Wager and Moyale and Lokichogio International Airports and Moi and Kisumu Airports.
Ms Ngetic said the FRA has so far raised Sh1.78 trillion against a target of Sh1.908 trillion resulting in a deficit of Sh128 billion in the 10 months of this fiscal year.
It said the amount collected as of April 2023 reflected a growth of 7 per cent compared to the Sh1.662 trillion recorded in a similar period last year.
Ms. Ngic attributed the shortfall of Sh128 billion to delays in treasury payments to provinces and ministries to settle huge outstanding bills owed to suppliers and contractors.
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