The Treasury on Tuesday defended the decision to reintroduce sections of the rejected Finance Bill 2024, despite protests from a section of Kenyans, claiming that the push would help the government reduce borrowing.
Officials from the Treasury Ministry led by the Director General of Budget, Fiscal and Economic Affairs Albert Mwenda told Citizen TV that the government aimed to raise Ksh170 billion from the reintroduction of the contested bill.
The Ministry revealed that the push would help the government sustain its operations as it aimed to generate between 0.9 and 1 per cent of the Gross Domestic Product(GDP) in revenue that would translate to Ksh170 billion.
‘’That is around Ksh170 billion give or take, we are not entirely bringing the bill back as you can remember that we lost about 2 per cent of the GDP in revenue. We are not going to recoup everything from the bill,’’ Mwenda stated.
However, Treasury officials noted that the amount would help the government recover all the revenue lost from the shelving of the Finance Bill 2024 in June this year as a result of the anti-government protests.
‘’The intention of this is to ensure that we do not lose on the good proposals that Kenyans had proposed to Treasury,’’ he added.
The Treasury also revealed that it was keen on employing other financial consolidation steps that included exit from Eurobond loans and instead focus on financing mechanisms such as Public-Private Partnerships.
According to the Treasury, the debt crisis that is currently facing the country could only be avoided by not borrowing from the domestic market.
‘’If we continue borrowing, especially from the domestic market, then it means interest rates will remain high, business will not be able to borrow and will crowd out private businesses,’’ Mwenda added.
This happens even as there has been pressure on the government on the risk of crippling key financial decisions as a result of borrowing heavily from commercial banks.
The treasury will also seek to move some zero-rated commodities such as sanitary pads and diapers to attract taxes, a decision that could potentially increase the prices.
The Treasury’s direction to reintroduce some sections of the Finance Bill is likely to be met with rejection from Kenyans, particularly considering that it was the reason many hit the streets to protest in May and June this year.
The government has been facing pressure from the International Monetary Fund(IMF) which advocated for the introduction of financial consolidation mechanisms to curb the growing public debt.
