Taxpayers to foot more State spending

By James Anyanzwa

Taxpayers will pay for an increase in spending by the Government of Sh72.3 billion in the current financial year.

This in addition to the initial projected spending for the year that was pegged at Sh634.7 billion, according to preliminary estimates released by Treasury yesterday.

The additional spending comes after removing one-off items, including the General Election and post-election related interventions, like the resettlement of some of the internally displaced persons.

In his Budget Outlook Paper (BOP), Economic Secretary Geoffrey Mwau indicated that total revenues could hit Sh574.4 billion (in nominal terms), underpinned by continued reforms in tax and customs administration, as well as streamlining of tax exemptions.

The resultant overall deficit (including grants), estimated at Sh91.9 billion, is to be offset through net external financing amounting to Sh11 billion. The remaining Sh80.9 billion will be financed through domestic borrowing of about Sh38.4 billion, which includes domestic infrastructure bonds of Sh11.5 billion.

The balance of Sh42.5 billion represents sovereign bonds proceeds of Sh40.5billion that will be earmarked for infrastructure projects and privatisation proceeds of Sh2 billion.

“The risks to the outlook for 2009 include a further weakening of economic growth in advanced countries,” said Dr Mwau. “This is expected to impact negatively on Kenya’s export demand, lead to a decline in commodity prices and further slow down in receipts from tourism and remittances,” he said.

|   |    |    Comments (0) |   Add Comment