Kenya has announced a drastic cut in the fiscal
deficit from 9 percent of the Gross Domestic Product (GDP) to 4
percent by 2019/2020, buoyed by increased domestic revenue
collection and the restructuring of the foreign debt.
Treasury Minister Henry Rotich told Parliament on Thursday
evening that the government recorded a higher financial
shortfall equivalent to 9 percent of the country’s overall
economic strength as a result of overspending on a strike by
doctors, nurses and teachers, security and challenges of
"The result was a higher fiscal deficit of 9 percent of GDP,
financed by external debt, fiscal consolidation and increased
grants," Rotich said while presenting this year’s budget
statement for the 2017/18.
Kenya and other East African countries usually present their
annual spending plans on a simultaneous date across the region
as part of the ongoing effort to synchronize economic
Kenya, which released this year’s fiscal plan, ahead of other
East African countries because Parliament needs to be dissolved
ahead of this year’s August polls, said improved tax collection
effort and minimized leakage of government taxes were part of
measures to cut the overall fiscal deficit.
Kenya unveiled its 26 billion U.S. dollar budget on Thursday,
saying the new budget for the year, would guarantee funds to the
Independent Electoral and Boundaries Commission (IEBC) to
conduct the elections in August.
The government also announced allocation of funds to improve
public infrastructure, such as 750 million dollars towards the
continuation of the Standard Gauge Railway (SGR) project to
Naivasha, 100 km outside Nairobi, to enhance transport within
Rotich said measures under implementation this year would
enable the government to achieve rapid economic growth, cut the
fiscal deficit and bolster the tax administration system through
The new measures announced by the government follow the
recent launch on a trial basis of the mobile-phone enabled
government bond purchase programme.
Rotich also introduced a 50 percent tax on the gambling
Rotich introduced new tax measures in the 2016 Finance Act
that set betting taxes on gaming revenues at 7.5 percent,
lottery tax on turnover at 5 percent and gaming tax at 12
"The betting and gaming have become widespread in our society
in an environment that is inadequately regulated.
"Its expansion is beginning to have negative social effects
in particular on the young and vulnerable members of our
society," Rotich said.
"I, therefore, propose to raise taxes for betting, lottery,
gaming and competition from the current rates of 7.5 percent, 5
percent, 12 percent and 15 percent, respectively to a uniform
tax rate of 50 percent for all categories," Rotich said in his