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"content": "business community to voluntarily embrace the system instead of waiting to be required to do so. Mr. Speaker, Sir, I would like to bring to the attention of all Kenyans that tax evasion is, indeed, an economic crime that is punishable under the Anti-Corruption and Economic Crimes Act. Going forward, the Governmentâs response to tax evasion will be robust and swift. The Government is, indeed, aware that some forex bureaux are aiding tax evasion through engagement in business activities they are not licensed to undertake. To address this, I have directed the Central Bank of Kenya, and the Kenya Revenue Authority, to jointly undertake a comprehensive audit of the operations of all forex bureaus and submit their final report to my office by the end of September, 2010. Mr. Speaker, Sir, the measures that I have outlined to streamline the tax administration are just part of the solution in terms of addressing compliance burden to the business community. As I did comment in my Budget Speech last year, the Tax Harmonisation Task Force has completed its work and we have also benefitted from international expertise on the next course of action to review, comprehensively, our tax system. Going forward, the Government will appoint a Tax Reform Commission to come up with a tax code which is simpler and consistent with our Vision 2030. As a first step in this direction, I will fast truck the review and formulation of a new VAT legislation to be tabled for debate in the next Budget. When enacted I expect the new VAT legislation to deal with most of the current challenges experienced by VAT taxpayers, including refunds. Consistent with the Government Policy stance for Vision 2030, we will deepen the public financial management reforms to reduce waste, ensure efficiency and economy in the use of public resources. The implementation of these reforms will improve effectiveness in public service delivery and facilitate growth of private sector as the engine for growth. To this end, we will continue with the strategy of containing growth of total expenditure, while shifting the composition from recurrent to capital expenditure and eliminating unproductive expenditures. In particular, Development Expenditure will rise to 11.7 per cent of the GDP in 2010/2011 up from 10.3 per cent in 2009/2010. Mr. Speaker, Sir, a critical component of our efforts to further entrench public financial management reforms includes institutionalizing and fully deploying the Integrated Financial Management Information System (IFMIS) a single integrated platform. To this end, an action plan for the full roll out of IFMIS will be ready for implementation by the end of September, 2010. Let me also add that effective implementation of IFMIS will require all the key players to embrace the technology. In this regard, all Accounting Officers will be required to be actively involved in its implementation as part of their performance contracts. As I emphasized during my Budget Speech last year, we can no longer afford to continue providing budgetary resources to Ministries and departments that cannot fully spend and account for the results to Kenyans. In my Budget Statement last year, we committed to enhance absorption of development budget. However, while there has, indeed, been some improvement in the current financial year compared to the previous yearâs absorption rate, there is still room for further improvement. Mr. Speaker, Sir, through this Budget we are committing once again but with additional actions to enhance the execution rate of both domestically and foreign financed development budget. We will achieve this by ensuring that Accounting Officers commit in their performance contracts for 2010/2011 to absorb at least 90 per cent and 80 per cent respectively of all domestically and foreign financed"
}