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"id": 252726,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/252726/?format=api",
"text_counter": 177,
"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. Deputy Speaker, Sir, I want to thank the senior counsel for that correction. I meant that we should put our differences aside. Mr. Deputy Speaker, Sir, turning to the under-performance in revenue collection, this was mainly occasioned by a shortfall under the Import Duty due to the implementation of the new tax administration system by the Kenya Revenue Authority (KRA). However, as you will note, there is a close relationship between Import Duty and other domestic taxes. The under-performance will, therefore, also affect the collection of Value Added Tax (VAT) and Excise Duty. Accordingly, the ordinary shortfall on ordinary revenue is Kshs5.2 billion. This shortfall is mainly attributed to a shortfall in Import Duty of Kshs4 billion, Excise Duty of Kshs1.4 billion and VAT of Kshs822 million. Our investment income has also fallen by Kshs1.2 billion. Mr. Deputy Speaker, Sir, these shortfalls are, however, mitigated against by the increase in other revenue sources by Kshs2.3 billion, an increase in Appropriations-in-Aid (A-i-A) by upwards of Kshs4.5 billion. The new tax management information systems will, however, be streamlined to ensure that the revenue targets for the rest of the financial year are achieved. Poor disbursement of donor funds has delayed the implementation of donor-funded programmes. The reductions which we are seeking, therefore, under the Development Vote will mainly be due to adjustments on the donor commitments. The net reductions amount to Kshs7.5 billion. Mr. Deputy Speaker, Sir, as hon. Members will be aware, the Government has initiated personnel audits in the Ministries and departments. This audit, and the implementation of the Integrated Payroll Personnel Data (IPPD), has yielded savings on the wage bill and, as a result, our projected saving on the wage bill is Kshs2.4 billion. The Government will continue with the payroll cleansing programme to roll out and strengthen the IPPD in the remaining few Ministries and departments to ensure that maximum benefits are gained from this management strategy. Mr. Deputy Speaker, Sir, I have prepared the Revised Estimates for 2005/2006 Financial 612 PARLIAMENTARY DEBATES April 20, 2006 Year, taking into account the above factors which have influenced the implementation of this year's Budget. Some of the effects and influences of these factors on the Budget are as follows:- The first one is that we require an urgent disbursement of Kshs6.9 billion for drought intervention. Secondly, there was a reduction of revenues and the revision downwards of the annual targets. Thirdly, and as a matter of necessity, we need to allocate Kshs4 billion for emergency power supply. The fourth factor which has affected us is the reduced donor funding under those projects and other donor-funded programmes. Fifth is the allocation of funds for health workers under the Ministry of Health and the settlement of pending utility bills in various Ministries. The sixth item, which might be of interest to hon. Members, is an increase in the allocation to the Constituencies Development Fund (CDF) by Kshs200 million. Mr. Deputy Speaker, Sir, the Motion before this House is, therefore, to seek approval of the net Supplementary Appropriation of Kshs7.5 billion and also the approval of Kshs7,552,459,760 in the Recurrent Vote and a reduction of Kshs7,539,795,260 in the Development Vote. The overall net Supplementary Estimates for 2005/2006 Financial Year is, therefore, Kshs12,664,494. At this point, I would like to correct the impression that has been created out there by the media that the Government is broke and that we are seeking an extra Kshs20 billion. We are actually only seeking Kshs12 million after the offsets. Mr. Deputy Speaker, Sir, the approval of the House is also sought for the proposed re- allocations and the application of the additional A-i-A under the various Ministries and departments. The approval of this Motion will enable the Government to carry on with its services to our beloved nation without interruptions until 30th June, 2006. Mr. Deputy Speaker, Sir, hon. Members may have realized that the overall net supplementary appropriations being sought is far below the huge amount of funds required for drought intervention, other related activities and other financial requirements by the Ministries and departments. In order to reduce the burden on the Exchequer, I have re-allocated funds from the slow-moving expenditures to accommodate the required additional funds. As you are all aware, there are projected savings related to debts that may not be made this financial year due to various reasons, and these include commitments on the security-related projects for which we laid the Controller and Auditor-General's Report on the Table so that the House can guide us on whether we should be paying those debts and how much of those debts we should not pay. Accordingly, I have also re-allocated those funds in order to maintain low levels of domestic borrowing, which we need to maintain at not more than Kshs30 billion. Mr. Deputy Speaker, Sir, due to the proposed reduction of expenditures, the overall borrowing from the domestic market may increase by up to Kshs5.9 billion, from Kshs25.4 billion - where we are operating now - to not more than Kshs31.3 billion. That represents about 6.2 per cent of our overall Budget. Mr. Deputy Speaker, Sir, before I conclude, I wish to appeal to hon. Members, once again, that as we sit in this House, and as representatives of the people out there, we have the privilege of deciding their fate. We have up to 3.5 million Kenyans who are relying on the passage of this Motion which is before us today. They need to get relief food supplies in order to survive. Mr. Deputy Speaker, Sir, let us remember those people. Let us remember the desperate children, mothers, and those who are watching their cows die everyday. Yesterday, we discussed the current conflict over pasture and so on. Let us have those images at the back of our minds as we decide. By passing these Supplementary Estimates, we will be throwing a lifeline to Kenyans out there. We need the money to mitigate against drought. Finally, I wish to thank hon. Members for their support that they have always accorded the Treasury, in the management of the economy. I appeal for their continued support to pass this Motion. April 20, 2006 PARLIAMENTARY DEBATES 613 With those few remarks, I beg to move and ask the Minister for Planning and National Development to second."
}