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"id": 218007,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/218007/?format=api",
"text_counter": 57,
"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
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"content": "Mr. Speaker, Sir, let me turn to the issue of creating a competitive environment for business growth and expansion. To attract investment and to remain competitive in the global economy, Kenya must have an efficient and predictable regulatory business environment. This is an area where we have important challenges ahead of us, but it is also an area where the Government's sustained efforts are beginning to bear fruit. The comprehensive review of all business licences in Kenya, which started in 2005, is now coming to an end with specific action designed to reduce the licensing burden on businesses. Mr. Speaker, Sir, for the first time ever, we have a comprehensive overview for the number of business licences in Kenya - they total 1,325. Out of these licences, the Government has already eliminated, over the last two years, 110 and simplified eight. Today, I propose to eliminate another 205, and to simplify another 371 licences. As announced in last year's Budget Speech, we are also putting in place mechanisms to ensure the quality of new regulations and licences. Mr. Speaker, Sir, a good business environment requires a sustained and systematic Government effort. Building on the positive results of the Business Licensing Reform, the Government is working on a Regulatory Reform Strategy. This strategy will provide a blueprint for future efforts to streamline and improve the broader regulatory business environment. It will build regulatory reform capacities within Government agencies and within other key stakeholders. One key aim of the strategy will be to cut Government red tape in priority areas by 25 per cent over the next three years. It is a strategy we are referring to as \"moving from red tape to red carpet for our people\". Turning to the financial out-turn for 2006/2007, as hon. Members will recall, the total revenues (including LATF), were originally estimated at Kshs375.9 billion comprising of Kshs336.8 billion in ordinary revenue and Kshs38.9 billion in Appropriations-In-Aid. I am pleased to report that despite some challenges faced in collection of taxes, especially in Excise Duty on petroleum, total revenues are on target and are now estimated at Kshs376.1 billion, thanks to the additional enforcement steps taken by KRA and the co-operation of the Kenyan taxpayers. Of this total, Kshs338.5 billion is ordinary revenue and Kshs37.6 billion is Appropriations-In-Aid. On expenditures, the 2006/2007 Printed Estimates indicated Recurrent Expenditure, including those financed through Appropriations-In-Aid of Kshs283.4 billion. The Consolidated Fund Services took another Kshs129.1 billion while Development Expenditures took a total of Kshs137.6 billion. Owing to unforeseen commitments, we recently requested Parliament, and it so 1836 PARLIAMENTARY DEBATES June 14, 2007 granted, to authorise additional expenditures under the Supplementary Appropriation Bill amounting to Kshs26.9 billion. This increased total expenditures to Kshs577 billion, basically comprising of Kshs293.9 billion in Recurrent, Kshs142.4 billion in Development and Kshs140.7 for non-discretionary or Consolidated Fund Services. Mr. Speaker, Sir, the Consolidated Fund Services for 2006/2007 consisted of Kshs36.4 billion for domestic interest; Kshs5.7 billion for foreign interest; Kshs23.3 billion for pensions, gratuities and other non-discretionary expenditure. In addition, Kshs57.2 billion and Kshs16.7 billion were provided to finance domestic and external redemptions respectively. Enough of the past, I am turning to the projections for 2007/2008, the financial out-turn. Mr. Speaker, Sir, let me now turn to the 2007/2008 Budget. The total revenue target for the fiscal year 2007/2008 is, as I said, Kshs428.9 billion, representing 20.8 per cent of our GDP. This will comprise of Kshs389.2 billion in ordinary revenue and Kshs39.6 billion in Appropriations-In- Aid. The targeted revenue is predicated on the on-going reforms in tax modernisation, customs administration and simplification of taxation for the small enterprises. On expenditure forecast, as hon. Members have noted from their copies of the Printed Estimates, gross Recurrent Expenditures for 2007/2008 are estimated at Kshs491.9 billion. This includes Kshs38.2 billion to be financed through Appropriations-In-Aid, and payments for Consolidated Fund Services amounting to Kshs154.2 billion. The discretionary Recurrent Expenditure amounts to Kshs337.8 billion. On Development Expenditure, the gross Development Expenditures for 2007/2008 are estimated at Kshs201.7 billion. Out of this amount, Kshs52.2 billion will be financed through Appropriations-In-Aid, which consist of direct project financing amounting to Kshs21.2 billion in loans, Kshs27.9 billion in grants and Kshs3 billion in local Appropriations-In-Aid. Consequently, I expect to finance net Development Expenditures amounting to Kshs149.4 billion from the Exchequer, comprising of Kshs15.2 billion in grants, Kshs17.3 billion in loans and a net of Kshs116.9 billion from the Government of Kenya own resources. Mr. Speaker, Sir, the proposed composition of expenditure is consistent with the Government's objective of gradually increasing the share of Development Expenditure. Indeed, with the proposed sharp increase in capital spending in 2007/2008, the share of Recurrent Expenditure will have declined from 83.6 per cent of total expenditure in 2002/2003 to only 70 per cent in 2007/2008 conversely, the share of Development Expenditure will have risen obviously from 17 per cent to 30 per cent. On external grants, I have received commitments amounting to Kshs36.5 billion and Kshs45.3 billion in loans to finance projects. Details of the donors and the projects financed are included in the Development Estimates, and I would like to record our thanks for our partners' coming to support us. Mr. Speaker, Sir, the overall fiscal deficit, having taken into account those grants, will amount to Kshs109.8 billion, mainly on account of a higher Development Expenditure. After taking into account expected net foreign financing of projects that amount to Kshs39.8 billion, the deficit to be financed domestically will amount to Kshs70 billion. I plan to finance this deficit through net privatisation receipts amounting to Kshs36.1 billion and domestic borrowing of Kshs34 billion. This means that the fiscal framework for the year 2007/2008 is fully financed and there are no financing gaps."
}