Kenyans may soon be forced to pay more levies and fees to access services from public institutions after the National Treasury proposed that Ministries, Departments and Agencies (MDAs) should do more to cut over-reliance on the exchequer.
To that end, the government, in the Draft 2024 Budget Policy Statement (BPS), proposed introducing or increasing charges on services offered to generate non-tax revenues.
Non-tax revenue is income earned by the government from various other sources besides taxes.
"Eventually, the majority of the MDAs are expected to be self-financing. These policy strategies are expected to expand the primary surplus in the fiscal framework and stabilize the growth of public debt thereby boosting the country’s debt sustainability position," Treasury Cabinet Secretary Njuguna Ndung'u stated in the document.
Despite recommending the introduction of fees and levies, the government expressed its intention to ensure that they are reasonable and do not burden Kenyans.
The government is also keen to place a ceiling on the levies and fees charged by MDAs based on the response witnessed after the State Department proposed hiked fees for select government services such as ID replacement and passport issuance.
Over the next four years, the Treasury wants all MDAs to not only adopt non-tax revenue measures but also transfer money to the exchequer. This will be enhanced by the implementation of the universal pay bill, 222222.
The Ministry of Lands and the State Department for Immigration and Citizen Services were among the MDAs listed to implement the new measures.
According to the BPS, by implementing the non-tax revenue measures, the government anticipates lowering the fiscal deficit to the Gross Domestic Product (GDP).
In the financial year 2024/25, the Treasury directed, all MDAs and Sector Working Groups to prepare their budgets for the hard sector ceilings and adopt the value chain approach.
Treasury Principal Secretary Chris Kiptoo explained that the policy measures outlined in the 2024 BPS are expected to improve economy-wide efficiencies, create an enabling environment that supports growth in businesses and investment, reduce the cost of living as well as enhance the well-being of all Kenyans.
"The tight fiscal stance is expected to reduce debt vulnerabilities through the implementation of reforms to broaden the domestic tax base and improve tax compliance," he added.
