NAIROBI, Kenya, April 28 – Kenya projects to collect Sh2.89 trillion in the 2023/24 financial year (FY), representing 17.8 percent of the gross domestic product (GDP).
The collection will represent an increase of about Sh370 billion over what was collected in the previous fiscal year.
“Revenue Collection is projected at Ksh. 2893.6 billion (17.8 per cent of GDP) in the FY2023/24, an increase from FY2022/23 which stands at Ksh.2528 billion, and is expectedto rise further to Ksh.4,195.2 billion (18.3 per cent of GDP) by the FY 2026/27,” A despatch from the Executive Office of the President read.
Revenue growth will be boosted by 6.1 percent growth in its economy.
“Leading Indicators show a strong performance of theKenyan economy in the first quarter of 2023, reflecting robust activity in the service sectorand also in the wholesale and retail trade, accommodation and food services, educationand information and communication,” it added.
“The growth outlook will be supported by a broad-based sector growth, includingcontinued strong performance of the service sector and recoveries in agriculture, while thepublic sector consolidates,” it added.
“From the expenditure perspectives, private consumption isexpected to support aggregate demand, supported by the ongoing labor market recovery,improved consumer confidence and resilient remittances.”
The growth will see the government spend Sh3.5 trillion in this coming fiscal year, with recurrent expenditure at Sh2.47 trillion and Sh689.1 billion on development projects.
However, the fiscal deficit will stand at Sh663.5 billion, a reduction from Sh1.2 trillion in the previous FY.
“Currently the fiscal deficit Is estimated at 5.7 per cent of GDP having Improved from6.2 per cent in the previous year, owing to reduced borrowing, and expenditure reorganization,” it said.
While devolved units will be allocated Sh385.4 billion in the 2023–24 FY, the judiciary will get Sh22.9 billion.
To achieve its bottom-up transformation agenda, President Will Ruto will spend Sh267.7 billion in areas such as cotton, textiles, apparel, dairy, tea, and rice, among others.
The state is also proposing a VAT exemption on liquefied petroleum gas (LPG) to reduce prices and discourage the use of biomass fuel and the destruction of forests.
“In order to promote local processing of tea and value addition forexport, the Bill proposes to exempt from VAT, tea purchased from factories or the auction centre for the purposes of export,” it said.
“In addition,there is a deliberate assessment of tax incentives required for domesticcapacity of packaging materials to support value-addition for the teaexport Industry.”
