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{
    "id": 1076788,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1076788/?format=api",
    "text_counter": 533,
    "type": "speech",
    "speaker_name": "Kitui Rural, CCU",
    "speaker_title": "Hon. David Mboni",
    "speaker": {
        "id": 13388,
        "legal_name": "David Mwalika Mboni",
        "slug": "david-mwalika-mboni-2"
    },
    "content": " Thank you, Hon. Temporary Deputy Speaker for giving me this opportunity to also contribute. I would also like to thank the Committee for a work well done. Despite the challenges due to Covid-19, the 2021/2022 Budget is the biggest in the history of this country at Kshs3.66 trillion. At the same time, it has the biggest deficit of Kshs900 billion. The total revenue projected is Kshs2 trillion and the other revenue basically from taxes is Kshs1.776. These revenue projections are based on economic recovery and stable micro-economic environment. The GDP is projected to grow at 6.3 percent and is supported by stable economic environment, domestic and external demands. However, I have a problem with this projection. Historically, the growth of Kenya after experiencing low economic growth… There is no way the economy can grow at 6.3 per cent. In the Year 2000, the economy grew by 0.6 per cent. The Year 2001, the country grew by 3.8 percent. The Year 2008, the economy grew by 0.2 per cent. In 2009, it grew by 3.3 per cent. Last year, the economy grew by negative 0.4 percent. This year, there is no way this economy can grow by 6.3 percent. If these assumptions are not going to be achieved at 6.3 percent, improved domestic and external demand, we are likely to have a huge revenue shortfall and budget deficit; more borrowing and high public debt. We have to be very careful. I have been telling the National Treasury that they have to be very careful when it comes to projections. It is high time we funded planning activities in this country. I think it is because they are using their thoughts to project the figures, and they are not good for this country. We should note that the tax revenue, as a percentage of GDP, has been very low since 2013. It declined from 25 per cent then to 17 per cent currently. The recommended percentage is 20 per cent. That way, the country can fund all these activities. We need to note that there are only three sectors which contribute to 52 per cent of tax revenue. These are manufacturing, Information Communication Technology (ICT), and banking and insurance sectors. The Government should come up with tax policies and measures to raise tax revenues from other sectors. Otherwise, these sectors are over taxed. In fact, currently there is a lot of smuggling of beer and cigarettes into this country. This is because taxes on beer and cigarettes have really gone up and, therefore, people are taking beer and cigarettes from other countries whose tax regimes are lower. Continuing to tax these industries may force some companies to relocate to where the tax regimes are favourable. If they relocate, we will lose jobs, household incomes, and revenues. If these companies relocate we will not collect Pay-As-You-Earn (PAYE). We are going to miss corporate tax and therefore our GDP is also going to go down and we will have more problems. We have seen Kenya Revenue Authority (KRA) struggling to raise revenue. Moreover, these problems are because of low funding by the Government. The KRA should be funded. In fact, they are telling us that if you give them one shilling they are going to raise Kshs100. The KRA needs to be funded to buy scanners for use at the border posts, modernise The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}