, NAIROBI, Kenya, Jun 13 – Economic experts are hopeful that the government will be able to raise Sh1.2 trillion in revenue to fund the Sh1.8 trillion 2014/2015 budget for Kenya.
Institute of Diplomacy and International Studies Associate Director Gerishon Ikiara says the proposed new laws and institutions especially in the financial sector will be key in adding tax revenue.
Ikiara says although the target is based on projected economic growth, the Kenya Revenue Authority is expected to institute measures to expand the revenue base and eliminate tax leakages.
“We are pleased to hear that the CS is proposing tax law reforms to simplify them and make them consistent with international best practices. The proposed Income Tax Act, Excise Duty Act and Tax Procedures Bill – aimed at harmonising procedures across all tax legislations – are all worthy initiatives. But the devil will be in the detail of how these are implemented in a timely manner, without impacting on the ease of doing business in Kenya,” Ikiara said.
However Ernest & Young Chief Executive Officer Gitahi Gachahi, says most of the proposed government interventions in 2014/2015 are similar to those in the 2013/2014 budget, some of which were not fully implemented urging the proposed interventions be enforced to the letter.
“It is an ambitious budget, which will be tough to finance. But I am confident it will be financed in a responsible manner. The bigger issue that Government still has to deal with; is how we cut wastage,” Gichahi said.
On her part, Ernst & Young Advisory Leader for East Africa Celestine Munda warned against Governors’ impeachments arguing it will scare away investors and hinder development in the affected counties.
Munda says the counties have been allocated enough funds that can transform them.
She urged Members of County Assemblies to stop impeaching Governors who are working to create policies that will attract investments and good use of allocated funds.
She also urged county governments to use the money wisely in bid to transform the lives of Kenyans at the grassroots.
According to Vision 2030 Delivery Secretariat Acting Director General Wainaina Gituro, the budget read on Thursday by National Treasury Cabinet Secretary Henry Rotich has managed to comprehensively embrace Vision 2030 ideals by allocating significant financial resources across the flagship projects.
“The Sh1.8 trillion budget will particularly provide the much-needed impetus to support realisation of Vision 2030 and on-going programmes such as the Mombasa Port, Standard Gauge Rail project, and a range of social development projects,” he said.
Gituro lauded the budget as transformative, noting that the infrastructural projects budgetary allocations will set a good foundation to catapult the country’s economic growth to a sustainable 6 percent this year as the Vision 2030 strives for a 10 percent GDP growth.
Sh124.8 billion has been earmarked for infrastructural development, the Standard Gauge Railway, Jomo Kenyatta International Airport commuter rail; and Kisumu and Isiolo Airports upgrade and Mombasa Port modernisation.
Sh117 billion has been allocated for continued road expansion, upgrading and rehabilitation throughout the country while the energy sector was allocated Sh43.6 billion.
“The Standard Gauge Railway will improve our internal economy and our competitiveness in the region by improving the turn-round time and reduce significantly the cost of freight from Mombasa to Kisumu, by as much as 79 percent,” Gituro noted.
He added that the road expansions are timely for county economies expected to be the drivers of the national economy.
He also lauded the Sh17.4billion medium term funding for deployment of laptops to schools and content development and teacher training education and Sh0.32 billion for purchase of computers; Sh13.5billion free primary and Sh28.2 billion for free day secondary, pointing out that it will also help raise the country’s intellectual competitiveness against global benchmarks.
“At Vision 2030 Delivery Secretariat, we are excited that we now have a transformative budget that will help build the base for the implementation of flagship projects across all the Vision pillars,” Gituro explained.