Increased tax base to largely finance 2019/2020 budget - KBC

The 2019/2020 budget will largely be financed by the increased tax base.

National Treasury Cabinet Secretary Henry Rotich said the Ksh 3.02 trillion budget would have a deficit of Ksh 607 billion that will be financed through external borrowing of Ksh 324 billion and domestic borrowing of Ksh 283 billion while Kenya Revenue Authority is expected to collect Ksh 1.8 trillion.

The government seeks to increase the tax base through a raft of measures.

CS Rotich proposed an increase in capital gains from 5% to 12.5% as well as expanding the withholding tax base to include firms dealing in security, cleaning, catering and transportation of goods excluding air travel.

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The digital economy will also face taxation in terms of administrative measures to enhance revenue collection and seal revenue loopholes, a number of initiatives are underway Rotich says.

These measures include sustaining the fight against illicit and counterfeit trade, upgrading of ICT systems at KRA as well as support the fight against cross-border tax evasion.

To manage public debt, Rotich says treasury has strengthened the Public Debt Management Office under a Director-General to be responsible for public debt management and operations but noted that public debt is within sustainable.

The 2019/2020 budget comes with a fiscal deficit including grants of Ksh 607.8 billion which will be financed by net external financing of Ksh 324.3 billion and net domestic financing of Ksh 283.5 billion.

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