Budget

Inside Ukur Yatani’s 3 Trillion Budget

KEY POINTS

  • Treasury CS Ukur Yatani will in Thursday afternoon read the 2021-2022 budget in Parliament
  • The expected budget for the new fiscal year stands at 3.6 trillion shillings
  • Treasury is facing a tough time meeting budgetary obligations
  • 2021-2022 is Uhuru’s last full year budget as his term ends in August 2022

The budget will on Thursday afternoon be read in parliament, with Treasury Cabinet Secretary Ukur Yatani expected to outline his Sh3.6 trillion budget.

With an already struggling economy, Kenyans are a worried lot as Yatani is expected to widen his tax net.

With Uhuru retiring in 2022, this will be Uhuru’s moment to cement his legacy and treasury is seeking to raise more than Ksh 2 trillion.

With the cloud of covid-19 pandemic hanging over Yatani’s shoulders, he is walking a delicate rope.

The majority of the budget is expected to go towards funding the president’s legacy projects.

As projected, it will tough for Kenya Revenue Authority (KRA) to meet treasury’s projections, since it has perennially struggled to meet the targets in a largely informal economy where tax compliance is low.

Even as the budget is read, there is no room for Yatani to outline new taxation measures without hurting the Wanjiku.

The Treasury boss will be depending on banking on increased tax audits aimed at stopping revenue leakages through concealment and under-declaration of earnings by companies and households to grow revenue.

For the past few months, KRA has been raiding tax cheats and the same trend is expected to continue.

To further expand the tax bracket, the KRA has extended a partial tax amnesty to businesses and individuals who have tax arrears dating five years to pay up without incurring accumulated interest and penalties.

The Finance Bill has largely focused on streamlining the tax amendments introduced this fiscal year such as digital service tax — which yielded Sh252 million in February and March 2021 and is projected to rake in Sh1.5 billion next fiscal year.

Tax experts said the tax proposals including the introduction of VAT on basic goods such as bread and some medicaments, were likely to yield Sh40 billion at most.

 

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