Ministries and State Departments registered dismal aid collections in the first six months of the 2019/20 fiscal year to keep revenues below Treasury targets.
Fresh data from the National Treasury to December 31, 2019 tabulates total revenues at Ksh.920.6 billion against targets of Ksh.1.1 trillion in the review period to mirror a Ksh.138.7 billion shortfall.
The collections which translate to 8.9 percent of Gross Domestic Product (GDP) however represent a 15.9 percent growth year over year from the Ksh.794.7 billion collected in December 2018, an equivalent 8.5 percent of output.
Ministerial Appropriations in Aid (A-i-A) came in at Ksh.62.7 billion or an equivalent 0.6 percent of GDP against targets of Ksh.113.1 billion to end with a deficit of Ksh.50.3 billion.
The appropriations were however on the decline when compared year-on-year having registered a dip from Ksh.72.4 billion collected in December 2018.
Ordinary revenue collections represented in different tax nodes were however on the rise growing by 18.8 percent to Ksh.857.9 billion year on year.
The collections, which translate to an equivalent 8.3 percent of GDP, were however below the projected target of Ksh.946.2 billion in the period.
Growth in excise and income tax heads were attributed to the surge in ordinary revenues with the Kenya Revenue Authority (KRA) registering growth in all general revenue nodes.
Income taxes grew to Ksh.367.4 billion from Ksh.325.5 billion in a similar period in 2018 while Pay as You Earn (PAYE) peaked at Ksh.205.3 billion from Ksh.180.4 billion.
Value Added Tax (VAT) meanwhile registered an increase to Ksh.211.5 billion from Ksh.193.9 billion in 2018.
Wider budget hole
The continued slack in overall domestic revenue mobilization is expected to constrain the exchequer’s ability to fund the expanded Ksh.3.1 trillion budget as weaker collections result in a wider financing hole.
Further, the shortfall will pile pressure on the National Treasury leaving it with tough options which range from borrowing to the extreme of inserting cuts to spending through a second supplementary budget.
In the six months to December, the National Treasury has already leveraged borrowing through the mix of Ksh.106.2 billion and Ksh.37.3 billion in net domestic and foreign financing respectively.
The resulting deficit means total revenues will likely fail to hit the bulls eye pegged at Ksh.1.84 trillion and Ksh.240.4 billion in tax revenues and ministerial appropriations respectively.
The post Poor Ministry collections to blame for Treasury’s December revenue under-performance appeared first on Citizentv.co.ke.