The National Treasury has informed Parliament that amendments to the 2024 Finance Bill will result in a Ksh.200 billion shortfall in the revenue projected for the 2024/2025 budget.
In a letter dated June 19, Treasury Cabinet Secretary Njuguna Ndung’u addressed the clerk of the National Assembly, detailing the budget cuts that will be necessary across various departments in the three arms of government if the tax proposals in the Finance Bill 2024 are not approved.
“Should the Finance Bill 2024 be approved as proposed by the National Treasury, the National Assembly can proceed with the consideration of the Appropriations Bill as published; However, if the revenue-raising measures contained in the Finance Bill 2024 are not approved by the National Assembly, there will be a likely revenue shortfall of approximately KSh.200 billion,” Ndung’u said.
The Department of Energy will face the largest budget cut, with a Ksh.21.7 billion reduction impacting last-mile connectivity projects in constituencies.
According to Treasury Cabinet Secretary Njuguna Ndung’u, the Teachers Service Commission (TSC) will lose Ksh.18.9 billion, affecting the confirmation of Junior Secondary School (JSS) teachers.
The State Department of Higher Education will see an Ksh.8.3 billion cut, which will reduce allocations to the Higher Education Loans Board (HELB).
The National Government Constituencies Development Fund (NG-CDF) and the State Department for Roads will each suffer a Ksh.15 billion cut, impacting ongoing road projects. Both the fertilizer subsidy program and the county equitable share will face a Ksh.5 billion reduction each. Additional cuts include:
– Executive Office of the President: Ksh.451 million
– State House: Ksh.500 million
– State Department for Internal Security: Ksh.2 billion
– State Department for Arid and Semi-Arid Lands (ASALS) & Regional and Northern Corridor Development: Ksh.4.6 billion
– Defence Ministry: Ksh.7.7 billion
– State Department for Foreign Affairs: Ksh.1.8 billion
The Treasury plans to outline further measures by Friday to achieve an additional Ksh.21.6 billion reduction.
In presenting the 2024/25 budget on June 13, CS Ndung’u stated that Kenya aims to raise Ksh.3.992 trillion in the next financial year.
To meet this goal, the government plans to borrow Ksh.333.8 billion from external sources and Ksh.263.2 billion from the domestic market. The 2024 Finance Bill, currently under debate in Parliament, seeks to generate Ksh.346.7 billion through increased taxation.
However, due to public outcry, the Finance Committee has reduced some proposed levies, including those on bread, motor vehicle circulation tax, and excise duty on vegetable cooking oil.
The 2024 Appropriations Bill, which seeks to allocate funds for the 2024/2025 financial year, was first read in Parliament on Tuesday. It proposes the issuance of Ksh.1.8 trillion from the Consolidated Fund to meet public expenditure for the fiscal year. MPs are scheduled to consider the bill on Thursday afternoon.
