Treasury Cuts off Ksh 184.3 Billion in New Budget Review

The National Treasury has cut off 183.4 billion shillings from the 2019/2020 budget in the new budget review.

The National Treasury reached the decision of cutting off the budget due to the challenges faced in revenue projection for the current financial year and low revenue collection in the previous (2018/2019) financial year.

“In light of these challenges, the revenue projections for the financial year 2019/20 have been revised taking into account lower projection base on account of the Sh123 billion shortfall in financial year 2018/19 and revenue performance by end of August 2019,” read the newly revised document.

The National Treasury submitted The Budget Review and Outlook Paper (BROP) to the cabinet for approval and then it was tabled before the National Assembly. The new budget review will not affect the budget allocated to the county governments.

Suspended National Treasury Cabinet Secretary Henry Rotich had read the budget in June for the current financial year where he projected that the Government planned to spend 3.02 trillion by the end of June 2020.

Since the budget was read in June, the months of July and August recorded a shortfall in revenue collections, which prompted the Government to consider revising the budget.

Dr. Rotich had set a target of 1.877 trillion shillings for the Kenya Revenue Authority but its barely it is barely five months and the target has been revised to 1.853 trillion shillings.

KRA had targeted a number of employed individuals and companies but the rampant lay-offs of employees as well as frequent exits of firms from the Kenyan market is likely to affect the revenue collection come next year.

Expenditures by the government are likely to be reduced for this financial year. The National Treasury plans to reduce trips by government officials and advertisings by state departments.

Government officials and departments will first seek approval from the National Treasury in hiring workers and pay increases as well as starting new projects in order to cut spending.