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Govt Urged to cut unnecessary expenditure on the Sh3.66tn 2021/2022 budget

NAIROBI, Kenya, Jun 4- Financial experts are now calling on the government to cut unnecessary expenditure in the 2021/2022 budget to be presented to the public on June 10.

Analyst Reginald Kadzutu from Amana Capital said KRA has in recent months been hitting its target signifying a slight control in tax collection, forcing the government to explore other alternatives.

“It is the expenditure side of the budget that should come under hefty control.  According to the Budget Policy Statement, we have a deficit of close to Sh900 billion, this would be a very huge task for KRA to fill in so the government will continue to borrow,” he added.

As at April 2021, the Kenya Revenue Authority reported to have surpassed its target for the month to stand at Sh6.5 billion.

According to Kadzutu, some of the measures likely to be adopted will however hike the cost of living for citizens.

“ The problem we have at the moment is that close to 40 percent is going to debt payment, so that means there is going to be an increase on taxes as indicated in the finance bill, VAT that are increasing in various areas, they are still touting whether to increase VAT on fuel. We should expect to go into a tough in terms of cost of living because there is going to be a lot of cost pushing pressure as a result of funding the huge budget the government has in place,” he added.

Tax Director BDO East Africa Steve Okoth however called for a focus by the government in area that boost the economy which will in turn improve cash flow in the market.

“The question as to how to raise tax revenues lies on how do you stimulate economic growth, creation of jobs and most importantly how do you stimulate cash flow in the market,” said Okoth.

“ Some of the ways that this could be done include ending policies that negatively impact revenue-generating industries such as the proposed 20percent excise duty on betting will hurt the industry which has the potential to generate tax to government,” he added.

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National Treasury Cabinet Secretary Ukur Yatani is set to present the country’s spending plan for the 2021/2022 on June 10, estimated at Sh3.66 trillion.

The proposed budget estimates for FY 2021/2022 reveal that Infrastructure, Energy and ICT (Sh332.86 billion), Education (Sh509.2 billion), are some of the sectors expected to rip big in the upcoming budget.


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