Key numbers in 2018/19 Budget
Overall the Ksh3.074 Trillion budget has grown by about 10.83 percent from the 2017/18 financial year which was Ksh2.77 Trillion.
Here’s how the money will be split to various institutions:
Entity Allocations
National Government Ksh.1. 6 Trillion
Consolidated Fund Service Ksh. 962 Billion
County Allocation Ksh. 372 Billion
Parliament Ksh. 42 Billion
Judiciary Ksh.17 Billion (Proposed to be slashed by Ksh2.5 Billon)
Budget Expenditure of the National Government
Recurrent Expenditure 61.01%
(The wage bill (salaries) estimated at Ksh 416.86B. This figure represents 32.42% of total allocation towards national government)
Development 38.99%
Key Development spends:
Department of infrastructure Ksh 112.99 Billion
Department for Transport Ksh 90.42 Billion
Department for Energy Ksh 59.89 Billion
Public Debt Obligations
-Ksh870 billion has been set for debt repayment
-This represents a 25.79% compound growth from 3 years ago
-This will see the debt service-to-revenue ratio grow to 51.56%
-Debt service ratio threshold is 30% (Sustainable debt)
-Kenya’s debt obligation expected to hit an historic Ksh5 Trillion by June 2019
Financing the budget
Ordinary Revenue (mainly tax generated) is expected to be at Ksh1.74 Trillion
To achieve this, Rotich has proposed Income Tax Bill 2018 to do the following:
i). increase in individual tax rate to annual income above Ksh9 million from 30% to 35%;
ii). increase in corporate tax rate to companies with annual taxable income exceeding Ksh 500 million from 30% to 35%
iii). Presumptive rate of 15% of the single business permit fee issued by a County government (This targeting small business)
iv). the bill also seeks to move some items from zero rate to exempt. This is likely to push the cost of a number of basic goods up: largely medicine, fuel, and wheat and maize flour products
Deficit Financing
All revenue accounted for the budget still has a Ksh562 Billion deficit.
-This will require more borrowing to fund.
-Foreign and domestic borrowing will be put to use to bridge the gap.
County Allocations
County Governments will be allocated Ksh372 Billion. This broken down as follows:
i.) Equitable Share Ksh314 Billion
ii.) Conditional (Natl Govt rev) Ksh17 Billion
iii) Fuel Levy Fund (15%) Ksh8.2 Billion
iv) Conditional (loans & grants) Ksh33.2 Billion
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