The government plans to raise more money to fund Kshs 3.6 trillion budget for the next financial year starting July 1, up from Kshs 3.3 trillion in the current fiscal year.
The increased Kshs 0.3 trillion is as a result of higher spending plan by the Kenya Kwanza administration. The government has increased its recurrent expenditure, while cutting its development budget for the 2023-24 financial year.
Recurrent expenditure, which include wages and salaries, will take the lion share of President William Ruto’s first budget, where the government has projected a spending of Kshs 2.5 trillion, up from Kshs 2.2 trillion this year, amid an expanded public service.
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Development expenditure has been set at Kshs 689.1 billion representing 4.2 percent of GDP, which is a reduction from Kshs 715.5 billion in the current fiscal year.
The higher spending plan comes with an increased target for Kenya Revenue Authority (KRA), which will have to go after the few taxpayers, in an economy that is yet to maximize on the potential of the informal sector in widening the tax bracket.
Treasury has projected revenue collection at Kshs 2.9 trillion in the financial year 2023-24, an increase from the 2022-23 target of Kshs 2.5 trillion.
Fiscal deficit is projected at Kshs 663.5 billion, a reduction of more than Kshs 450 billion from the current year’s Kshs 1.1 trillion. The government plans to reduce borrowing implying that KRA will have to collect more revenue to fund the country’s budget.
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