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{
    "id": 344498,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/344498/?format=api",
    "text_counter": 28,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Members that in the course of implementing the Budget, we faced a number of challenges and emerging priorities which were not anticipated when I was preparing the Budget. To start with, the global economy is weak and seems to remain so in the medium, according to the latest International Monetary Fund forecast. While our economic growth is still resilient, the outcome of the first half of the financial year and the continuation of the global economic crisis is likely to pose a challenge in revenue mobilisation. Also, the economic recovery of the US has been rather slow. Recovery in the Euro Zone has actually been in recession. Mr. Deputy Speaker, Sir, all these challenges have affected us. Economic growth slowed down in the first half of 2012/2013 Financial Year but we expect it to pick up in the remainder of the financial year, given the favourable conditions and improved micro- economic environment. Hon. Members will recall that we have had more than adequate rains. Crops are doing very well. Except for the floods that we have witnessed, the weather forecast looks very positive. Short-term interest rates have also eased. Hon. Members will recall that there was a time when the interest rates were at 35 per cent. They have now gone down to an average of 16 per cent, which is a commendable effort. Inflation has also gone down from 19.1 per cent to 3.4 per cent. Again, this is a commendable effort. The exchange rate between the Kenya Shilling and the US Dollar has also stabilised. Hon. Members will recall that there was a time when the exchange rate was Kshs107 to the US Dollar. It has now stabilised at about Kshs83/84, which is just about right. Mr. Deputy Speaker, Sir, the only down side is on revenue collection. A shortfall was experienced during the first five months of the financial year. Assuming that we will be able to recoup the revenue shortfall within the remaining period of the second half, it is clear that it is not practical to finance additional expenditure from revenue resources. In order to confront the challenges of revenue shortfall and expenditure pressures, the Government will step up efforts on tax administration and mobilisation of revenue to eliminate leakages and increase revenue collection as targeted in this financial year as well as re-align and rationalise its expenditure. Mr. Deputy Speaker, Sir, if I may just explain this to hon. Members, because it would not be prudent to increase taxes; we are trying to stop all tax leakages. Target areas have been identified. These are basically the areas of counterfeits and fix. We are using over Kshs30 billion because of fix and counterfeits. So, we are going to revamp the anti- counterfeit agency to make sure that this leakage is plugged. Another area on which we have intelligence we are losing revenue is transport. We have intelligence that we are losing revenue in the areas of Advance Tax payment by"
}