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Economy

Teachers, Presidency among big gainers in mini budget

President Uhuru Kenyatta
President Uhuru Kenyatta. FILE PHOTO | NMG 

The Treasury has allocated the Presidency an additional Sh2.88 billion for its recurrent budget, placing it among the biggest gainers in the revised 2019/2020 public expenditure plans.

With the allocation, the Presidency is now among the seven ministries and State departments that have received increments of at least Sh1 billion in the Supplementary Budget.

The additional funds pushed the Presidency’s overall vote to Sh12.29 billion in the current financial year that will end in June, with State House Nairobi getting a sizeable chunk of the adjusted amount.

However, the budget for First Lady Margaret Kenyatta’s office suffered a Sh12.4 million reduction.

The Supplementary Budget II, published by the Treasury in response to the coronavirus pandemic, shows the recurrent budget for State House affairs has been increased from the initial Sh4.56 billion to from the initial Sh4.56 billion to Sh5.13 billion.

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State House Nairobi has been allocated an extra Sh578.02 million whose key driver has been marked as “other operating expenses,” with the budget for this item jumping from the initial Sh1 billion to Sh1.506 billion.

State House Mombasa and the State lodges in Sagana, Kisumu, Eldoret and Kakamega received cuts amounting to Sh134.5 million. The budget for State House Nakuru was left unchanged.

The increment to the Presidency’s overall budget was also driven by an additional Sh93.58 million for Cabinet affairs and Sh2.25 billion for the newly-created Nairobi Metropolitan Services.

State House’s additional budget is in sharp contrast with austerity measures announced by the government, which saw the President and his deputy take an 80 percent pay cut that would save taxpayers Sh25.68 million annually.

The recurrent budget for the office of Deputy President William Ruto was trimmed by Sh32.2 million to Sh2.38 billion while that of his spouse, Rachel Ruto, was slashed by Sh15.8 million.

The cuts in Dr Ruto’s office relate to Sh18.3 million reductions in the domestic travel budget and another Sh13.9 million in basic salaries for permanent staff.

Mr Kenyatta’s salary and that of Dr Ruto have dropped to Sh288,750 and Sh245,438 respectively after they took 80 percent cuts to free up more funds for the fight against the deadly virus.

The additional budgetary allocation to State House Nairobi alone erodes the gains that were to come from pay cuts for top public officers.

Under the voluntary salary cuts, Cabinet Secretaries will now earn Sh646,000 or 30 percent less and Principal Secretaries Sh612,150 or 20 percent less per month. The salary cuts will see taxpayers save Sh2.14 million a month from the Office of the President and his deputy and Sh12.67 million from Cabinet Secretaries and Principal Secretaries.

The pay cuts and supplementary budget, the second in the current financial year, were triggered by the global coronavirus pandemic that has disrupted economic activities in the wake of State directives to curb its further spread.

Kenya had 363 confirmed cases of Covid-19 and 14 deaths by yesterday after eight more people tested positive. The virus has infected nearly three million people globally, killing over 200,000.

Other big gainers include the State Department for Social Protection, Pensions and Senior Senior Citizens Affairs, with an additional Sh9.994 billion as the government adds money for the elderly and vulnerable groups to shield them from the impact of Covid-19.

The State Department of University Education received another Sh8.55 billion while Sh6.73 billion was added to the State Department for Correctional Services.

The State Department for Youth was added Sh3.096 billion while an additional Sh3.5 billion was given to the National Intelligence Service. Teachers Service Commission received another Sh3.27 billion.

However, the Treasury suffered the largest cut in its recurrent budget (Sh19.2 billion) followed by the State Department for Interior (Sh3.28 billion) and the National Assembly (Sh2.5 billion). Other key cuts in recurrent budget came from the State Department for Vocational and Technical Training (Sh780.2 million), Judiciary (Sh669.2 million), Parliamentary Service Commission (Sh511.8 million) and Sh462.8 million from the Ministry of Foreign Affairs.

The Treasury is running on a tight purse given that the coronavirus pandemic has come at a time when tax revenue has not been growing at the desired pace yet funding needs for devolution, social protection and development have been bulging.

Treasury Secretary Ukur Yatani is counting on reduced spending on non-essentials, such as trips and entertainmen,t to get some fiscal space in the Budget.

The government has taken some key sacrifices such as lowering value added tax from 16 percent to 14 percent, exempting those earning Sh24,000 and below from paying taxes and lowering resident corporate tax from 30 percent to 25 percent. This will cost at least Sh172 billion in foregone taxes.

This come at a time when Kenya is also battling floods and desert locust invasion, posing a policy nightmare to the country. Tax collection has also taken a hit with new data from the Exchequer showing that the Kenya Revenue Authority (KRA) posted a flat growth in collections for quarter three (January-March), reflecting a slowdown in business activities and jobs that started even before the Covid-19 pandemic shocks kicked in.

An analysis of government revenue data published by Mr Yatani on Friday shows that total tax receipts in the January to March 2020 period amounted to nearly Sh340.67 billion, largely unchanged from Sh339.27 billion in the same period a year ago. This is equivalent to Sh1.4 billion, or 0.41 percent, growth over the same period in 2019.

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