KRA protests Sh3bn budget slash on steeper tax targets

Times Tower in Nairobi, the Kenya Revenue Authority headquarters. FILE PHOTO | DENNIS ONSONGO | NMG

The Kenya Revenue Authority (KRA) has protested a Sh3 billion budget cut at a time the government has enhanced its targets to meet the Sh3.6 trillion budget in the year starting July.

This is after the Treasury reduced its budget to Sh23.7 billion for the financial year 2023/24 down from Sh26.3 billion allocated in the current financial year.

“The allocated funding works out to a total funding rate of 0.83 percent for recurrent, which is lower than the total National Treasury funding in the financial year 2022/23 of 1.11 percent,” Nancy Ngetich, acting commissioner general, told MPs.

Ms Ngetich said the KRA’s total expenditure submitted to the National Treasury was Sh57.4 billion or a two percent funding rate to enable the taxman to execute its mandate of revenue collection to finance the Sh3.6 trillion 2023/24 budget.

She said the total deficit against the budget submitted to the Treasury in January, excluding donor-funded projects is Sh34.54 billion out of which recurrent constitutes Sh31.45 billion and development (Sh3.02 billion).

The KRA Act requires that the taxman be funded up to two percent of the targeted annual revenue collection, which is set at Sh3.033 trillion in the coming year.

Ms Ngetich said the KRA requires Sh7.9 billion to comprehensively undertake revenue mobilisation programmes and activities to achieve the financial year 2023/24 required revenue growth of Sh504 billion and the target of Sh3.033 trillion.

She said the money will go towards field operations such as compliance, audit, intelligence, investigations and enforcement, transport, scanners, e-Seals maintenance, staff training and capacity building among others

“Inadequate funding puts at risk the achievements of the set revenue targets. Of critical importance is the requirement for additional 24 scanners for critical entry/exit points at a cost of Sh2.13 billion through leasing,” Ms Ngetich said.

Appearing before the Finance committee to present the KRA budget proposals for 2023/24, Ms Ngetich said there is no budget funding for additional scanners required for Isebania, Namanga, Loitoktok, Taveta, Lungalunga, Lwakhakha, Suam, Harissa, Wager, Moyale, Lokichogio, Moi and Kisumu International Airports.

Ms Ngetich said the KRA has so far collected Sh1.78 trillion against a target of Sh1.908 trillion resulting in a deficit of Sh128 billion in the ten months of this financial year.

She said the amount collected as of April 2023 reflects a seven percent growth compared to the Sh1.662 trillion recorded in a similar period last year.

Ms Ngetich attributed the deficit of Sh128 billion to delays in the Treasury disbursements to counties and ministries to clear the huge pending bills owed to suppliers and contractors.

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