The government has announced a new raft of austerity measures as it attempts to restore stability in the country’s finances.
National Treasury Cabinet Secretary Mr. Henry Rotich said the fresh measures would include cutting back on non-crucial budget allocations in key State departments, freezing non-essential spending and also pushing the taxman to enhance revenue collection.
Mr. Rotich said the move would ease widespread concerns about the country’s public finances by reducing the fiscal deficit and putting the economy on the right path to recovery.

“We are reviewing the budget to ensure that all expenditures first productive as much as possible and also areas we will slow down we will obviously do that so that we can achieve less borrowing in the market,” said Mr. Rotich.
He added: “Before we release funds to the ministries, we will be going into details, looking at those expenditures whether they are very necessary or not.”
As part of resource mobilization, Mr. Rotich said that the Kenya Revenue Authority, (KRA) had been tasked to come up with additional measures to improve collection of Value Added Tax, income and custom duties all of which he noted, witnessed significant declines at the start of the year.  “We are working very closely with KRA to ensure revenue collections remain on target.  We had challenges in the beginning of the year, but KRA has now come up with measures (to address this),” said Mr. Rotich in reference to the revenue gaps reported by KRA at the beginning of this year.
Mid this month, the National Treasury Principal Secretary, Dr. Kamau Thugge, disclosed that revenue shortfalls by the taxman to the period could have been as much as Kshs.12 billion.
While acknowledging that the Kenyan economy is facing headwinds fueled by a slowdown in the global economy, Mr. Rotich allayed fears of a financial meltdown, saying the worst was behind the country’s economy.
“This situation (cash crunch) is over, basically.  We have seen a return to normalcy in government in terms of our access of resources,” he said.
He added:  “Delays in meeting some of the demands does not in any way mean government is in a financial crisis.  We have never defaulted in our debts.  This talk of financial crisis is overblown in a way that does not reflect the economy of the country.”

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