Treasury has unveiled a series of far-reaching measures aimed at curbing the country's burgeoning budget deficit, proposing extensive expenditure cuts across all arms of government.
According to Treasury, failure to pass proposed tax measures outlined in the Finance Bill, 2024, could result in a substantial revenue shortfall of Sh200 billion.
In a letter addressed to the Clerk of the National Assembly, Cabinet Secretary Njuguna Ndung’u observed that the new measures are important to “remain within the provision of Section 40 (5) (a) and section 50 of PFMA, 2012, Cap 412 A”.
Parliament had sought advice on the various options that will enable the House to remain within the limits prescribed by the Constitution and the PFM Act in passing the two bills.
The proposed cuts reverse previously planned increases across Ministries, Departments, and Agencies (MDAs) as detailed in the Appropriations Bill for the 2024-25 financial year.
The judiciary is set to lose Sh2 billion, parliament (Sh3.1 billion) and the Executive Office of the President Sh451 million.
State House will also see a reduction of Sh500 million from its budget.
Key state departments to be affected are Basic Education facing a cut of Sh3.4 billion and Medical Services losing Sh4.7 billion meant for medical interns and equipment services.
Others are Roads Sh15.1 billion, Agriculture Sh6.7 billion, Social Protection Sh5.5 billion and Teachers Service Commission Sh18.9 billion.
Treasury has further proposed a Sh2 billion cut from Interior, Water (Sh11.6 billion), Ethics and Anti-Corruption Commission (Sh200 million), Independent Electoral and Boundaries Commission (Sh185 million) and Parliament (Sh3.1 billion).
Defence will see a Sh7.7 billion which includes Sh2.75 for security operations and Sh5 billion for modernisation being reduced, Registrar of Political Parties (Sh900 million) and National Police Service Commission Sh50 million.
The new measures come in the wake of a decision by the Kenya Kwanza MPs to drop some of the contentious tax proposals in the Bill.
The Bill is currently before the House.
At the same time, the Treasury is working on additional measures to be submitted to Parliament by Friday, June 21, to gather the balance of Sh21.6 billion.
