Nairobi — President William Ruto says the country’s total collection of Sh2.1 trillion is only enough to pay taxes and salaries, and thus there is a need for rooting for measures to slow the deficit hence reducing borrowing.
Speaking during the opening of the 13th parliament, Ruto noted that there is a need to invest at least 25 per cent of the country’s Gross Domestic Product (GDP) if the dream of becoming an upper-income country is to be achieved.
“This year alone, we budgeted to borrow Sh900 billion to finance both development and recurrent expenditure. You are all aware that our total collection is Sh2.1trillion which is only enough to pay debt and pay salaries, everything else we have to borrow. Then government members should never borrow to finance recurrent expenditures, it is not right, it is not prudent, it is not sustainable, it is simply wrong. We must bring ourselves and our country to sanity,” said Ruto.
The head of state stated there is a need to reverse the situation in the coming years to enable the government to contribute to the national saving efforts to keep the recurrent expenditure below the revenue.
“To this end, I have instructed treasury to work with ministries to find at least Sh300billion in this year’s budget so that we can remove it because the market cannot sustain the kind of borrowing we are doing as government,” added the president.
Ruto has further noted that plans are already underway so that by 2024, the recurrent budget of the country will be surplus.
In July, the Kenya Revenue Authority (KRA) surpassed the Sh2trillion revenue collection mark for the first time in the financial year 2021/22 after recording Sh2.03trillion.
This was the first time in 14 years the taxman surpassed the original target it had set after collecting Sh1.699trillion in the financial year 2020/21.