As Kenya struggled to unchain herself from the ever-ballooning public debt, the National Treasury has raised the current financial year’s debt target to 631.5 billion shillings.
For months now, the Kenya Revenue Authority (KRA) has failed to hit the revenue collection target despite efforts by the government to widen its tax net by introducing and increasing taxes in various sectors.
The government introduced a Value Added Tax of 8 percent on petroleum products, with an aim to increase revenue collection. The implementation of the presumptive tax of 15 percent that applies to more than 2.7 million SMEs started taking effect in January 2019.
Despite all the efforts to maximize revenue collection, the Treasury has raised the borrowing target for the year ending June 2019 by 78 billion shillings, one that will bring total amount borrowed in the year to 631.5 billion shillings.
According to Treasury CS Henry Rotich, the external borrowing for the country for the current year has increased by 34 billion shillings to 321.5 billion shillings. Net domestic borrowing is set to rest at 310 billion shillings from the initial target of 267 billion shillings in June 2018.
Kenya’s overall debt has surpassed the 5 trillion shilling mark raising concerns from various stakeholders including the World Bank and the International Monetary Fund (IMF).