KRA wants budget allocation capped to 2pc minimum of revenue collected » Capital News

NAIROBI, Kenya, May 23 – The Kenya Revenue Authority (KRA) is now pushing for its budget allocations to be capped at a minimum of 2 percent of total targeted revenue collection in every financial year.

KRA Commissioner General Humphrey Wattanga told the National Assembly Finance Committee that anything lower than the proposed percentage threshold will hinder execution of their mandate.

Currently, Wattanga told the House Team budgetary constraints has led to huge pending bills insisting the capping of the budgetary allocation at 2 percent of the revenue targets ought to be anchored in law.

“The Authority has severally submitted proposals on KRA funding for consideration in the Finance Bill to fix the funding in the KRA Act at a minimum rate of 2 per cent of Revenue Targets. The proposal has however not been approved despite justification presented,” he said.

KRA is pushing for its budget allocation to be increased to Sh35 billion in the proposed allocation for the financial year 2024/2025 to avert pending bills which majorly is recurrent expenditure.

In the budget proposals for recurrent funding for FY 2024/25 stands at Sh22.33 billion, supplemented by an Appropriation-in-Aid (AIA) of Sh3.64 billion, totalling Sh25.97 billion.

Wattanga however pointed out with current staff costs at Sh24.511 billion, only Sh1.45 billion remains for other operational needs, far short of the Sh15.09 billion required.

The Authority said that the amount allocated for the upcoming fiscal year 2024/25 will need to be reviewed blaming the Treasury over the low allocation.

The KRA Commissioner General decried that underfunding has led to increased pending bills with details showing that in the current financial year the pending bills have amounted to Sh 9.45 Billion.

Wattanga told the House team Sh4.98 billion is the amount of pending bills in different sectors and Sh4.47 billion in Excisable Goods Management System debt.

In the breakdown given,Sh1.2 billion is owed to staff medical service providers, Sh796 million for scanner leasing and maintenance contracts, Sh792 million for ICT system licenses and maintenance, Sh522 million for office rental leases, Sh173.9 million for insurance expenses.

The taxman owes a further Sh867.7 million for electronic seals maintenance (RECTS),Sh424.1 million for utilities and general supplies and Sh183.2 million for motor vehicle running, leasing, and repairs.

Records show that National Treasury has failed to disburse Sh7.1 billion of the allocated budget funds for the 2022-23 financial year leading to an increase in Pending Bills.

“In that 2022-23 financial year there was a budget funding allocation of Sh2 billion for the partial settlement of EGMS Debt which was not disbursed. The Authority has prioritized part of the amount in the current financial years additional funding,” said Wattanga.

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