NAIROBI, Kenya, Nov 14 – National Treasury Principal Secretary nominee Chris Kiptoo says that cuts on government expenditure will enable government reduce the budget deficit which currently amounts to Sh1 trillion.
Kiptoo who has previously served as PS for Trade and Environment during President Uhuru Kenyatta regime said that billions were being wasted on unnecessary expenditures.
During his vetting by the Finance Committee chaired by Molo MP Kimani Kuria, he opined that the government needs to cut on certain budgets which include stationary.
“We are having revenues of Sh2.2 trillion of which Sh1 trillion is used to service debt then we have salaries which take almost the same amount we collect as revenue. There is room to look at the quality of expenditures,” said Kiptoo.
“We are in a digital era and therefore we should do away with stationaries some of these things we can do on email,” he added.
The Principal Secretary nominee further pointed out that there is need for analysis of purchases done by the procurement departments in government to avert the variance in similar product and services.
Kiptoo noted that the government must ensure it obtains value for money in all purchased goods and services through consolidation of purchases in all government ministries.
“When I compare the ticket that has been paid for me compared to the one I have paid for my daughter to go to Mombasa they have a huge difference. Government is not getting value for money,” Kiptoo said.
The nominee pledged to robustly engage in formulating a framework to widen the tax base and increase tax compliance as fiscal consolidation measures.
With the current national debt standing at Sh8.8 billion and huge recurrent expenditure by the government, Kiptoo pointed out that there is need to increase the tax base by focusing on the informal sector which forms the majority of working force in the country.
“We have little fiscal space given the huge development agenda and we can only deal with this by widening the tax base and increasing compliance with those currently existing,” he stated.
“I will be joining a team that will be working on a strategy to increase the tax base and we will be looking at income tax for those in formal employment and also VAT which is a consumption tax because there is a lot being left out,” Kiptoo told MPs.
The Principal Secretary nominee mentioned that he will focus on fast-tracking the tax base to 20 million individuals from the current 6.1 million Kenyans which is below par.
Kiptoo asserted that the move by President William Ruto to support the informal sector will ensure that more than 16 million Kenyans without tangible income are netted in the tax base.
“The best way is to have a structured way of addressing the sectors and have a discussion with them and see what is the optimal rate. We have to work with KRA to ensure that businesses are supported because when we close businesses they are a lot of implications negatively,” he stated.
This comes a week after President William Ruto urged Kenyans to pay taxes to enable the government fulfill its mandate for Kenya to be an independent nation.
The Head of State stated that will be the viable solution to steer development in the country without huge reliance on foreign debts.
“The only way we can truly be an independent nation is when we can support our development with our own resources,” Ruto said.
President Ruto mentioned that his regime is working to solve the huge debt crisis due to the ballooning debt in the country which now stands at Sh8.2 trillion.
He revealed that the government is focused on financing development projects using taxes pointing out that the government is currently paying more than Sh1 trillion to service the huge loans currently.
“We must stop the tendency of borrowing from other countries and start looking for our own revenue. It’s possible by increasing our tax collections from the current Sh2 trillion,” he stated.