This archive report was first published on 27 October 2019.
On October 25, 2019, Treasury Acting Cabinet Secretary Ukur Yattani announced a KSh 131 billion reduction in the 2019-2020 budget, citing a revenue collection shortfall.
The government's tax base has been shrinking as many companies continue to close shop, exacerbating the revenue collection challenge.
According to Yattani, the reduction is aimed at making the government operate under a reasonable budget and enable it to set achievable tax targets.
"To avoid going back making budgets based on false assumptions, this time we have decided to be realistic. We have come up with those hostile measures. It is painful but unavoidable, we have no other option," Yattani said.
The Kenya Revenue Authority (KRA) had targeted to collect KSh 1.9 trillion in the 2019-2020 financial year, but its tax target will now be slashed by KSh 91 billion.
Out of this amount, KSh 25.3 billion will be reduced from Ordinary Revenue target and KSh 66 billion from other sources of government income.
The move comes at a time when concerns are rife about the ballooning public debt, which stands at a staggering KSh 6 trillion.
