Parliament has a huge undertaking in approving a budget of Ksh2.26 trillion for the last full financial year of the Jubilee administration.
This is Ksh200 billion more than the government planned to spend at the beginning of the current financial year, which began on July 1, 2015.
In the budget, Ksh850 billion is meant to go into recurrent expenditure, operations and maintenance in the ministries and departments as well as the salaries and wages of civil servants and elected representatives.
Treasury plans to spend Ksh809 billion on development, of which Ksh398.4 billion will be from domestic resources and Ksh410.6 billion from foreign finances.
Under the Infrastructure docket, Ksh154 billion is part of the loan by China for the standard gauge railway.
The Independent Electoral and Boundaries Commission gets Ksh19.6 billion as it starts preparing for the 2017 general election.
The Kenya Revenue Authority has its work cut out, after Treasury announced it wants it to increase tax collection to Ksh1.37 billion, from the Ksh1.18 billion target it had set in the current financial year.
“A reputable consulting firm has been engaged to deep-dive into the authority’s business processes and systems to propose realistic adjustments intended to reverse the shortfalls,” Treasury Cabinet Secretary Henry Rotich said.
The authority came under heavy backlash after it failed to meet its target in the previous financial year. This despite modernising the laws on value added tax, excise duty and revamping taxation procedures.
Earlier this month, KRA announced that it had recorded revenue growth of 11.7 per cent but still missed its target for the first nine months by Ksh69 billion. It had aimed to collect Ksh911.5 billion but ended the period with Ksh842.5 billion.
In the current financial year, Mr Rotich was forced to cut development expenditure by Ksh49 billion because of lower revenue collection than expected and the failure to use up the money as fast as planned. Development expenditure was set at Ksh526.6 billion. Treasury has in the past been criticised for setting its targets too high.
“It has been the trend in Kenya to have optimistic economic growth projections, which often result to higher projection of revenues. When the projected revenues are not achieved, the government is forced to reallocate, cut its budget or source for additional funds through borrowing,” the Liaison Committee said after scrutinising the Supplementary Budget.
According to a summary of the estimates, the budget has a deficit of Ksh689 billion. This money is expected to come from project loans (Ksh345.4 billion), commercial financing (Ksh153.7 billion), domestic borrowing (Ksh241 billion) and donors who fund specific programmes (Ksh3.8 billion).
The estimates, which were submitted to the National Assembly late Thursday evening, will now be scrutinised by the Departmental Committees as well as the newly-formed Budget and Appropriations Committee.
Spurred by concern over the approximately 1,000 ongoing projects that would need Ksh3 trillion over eight and a half years, the MPs had also asked Treasury not to finance any new projects until the current ones are finished.
Mr Rotich said no new projects except “very critical projects aimed at addressing emerging challenges” have been allocated funding.