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Kenya’s budget deficit crisis worrisome, as the government ponders where to get more tax dollars from

LONDON –  The Kenyan government appears to be facing considerable budget deficits and all signs of difficulties in how the government will raise more money to run the government spending functions are on the wall.

The deficit of the country is posing a problem as the finance ministers from four countries in the east African region prepare to announce their spending plans for the next year.

Uganda, Tanzania, Rwanda and Kenya customarily announce their budgets on the same day at the same time each year.

Economists say Kenya is considerably the biggest spender in the East African region. The Kenyan government’s estimated budget of $30.2bn (£23.8bn) is larger than all of the other countries in the region combined.

Kenyan currency

Current spending and revenue statistics suggest that the Kenyan government is not raising enough money from taxation, a factor which might pose a serious budgetary shortfall for the country.

Last December, data from the ministry of finance say the government’s budget deficit was $600m. Closing this budget gap is what some economists say demand critical response from the country’s Finance Minister Henry Rotich.

The Kenya Revenue Authority (KRA) “needs to widen the tax base”, according to Francis Kamau, a senior tax partner at Ernst & Young.

In such a dare situation, it means more people in Kenya will need to pay tax.

National Treasury Cabinet Secretary Henry Rotic

But Kamau said, “we do not anticipate that the KRA will be able to seal the deficits soon unless drastic measures are taken and effectively implemented.”

Activists and others says to deal effectively with the budgetary situation, the Kenyan government target waste especially the money wasted through corruption.

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Michael Harrington

Michael Harrington is a researcher and senior contributing reporter with Globe Afrique Media.

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