Scrapping of Finance Bill Translates to Kenya Borrowing More- President Ruto

Scrapping of Finance Bill Translates to Kenya Borrowing More

Scrapping of Finance Bill Translates to Kenya Borrowing More. Kenya will have to borrow a significant amount of money to operate its government following the public’s objection to a finance bill that included certain controversial tax increments.

Following the unfortunate incident that led to the parliament being set ablaze in the previous week, President Ruto promised to withdraw the bill containing controversial tax hikes.

Consequently, it will be hard for the government to raise enough tax revenue to operate effectively.

According to the President in a statement made on Sunday, dropping the bill had set the country back two years. He explained how hard it is to generate extra taxes while facing a huge debt burden.

Kenya would have to borrow one trillion shillings ($7.6bn; £6.1bn) just to finance the operation of the government. He mentioned that this is a 67% increase from what had been planned.

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Scrapping of Finance Bill Translates to Kenya Borrowing More: Mitigation Plans

However, to mitigate the negative impact of the situation, Ruto said he was thinking about cutting expenditures across government, including in his own office, as well as cutting allocations to the judiciary and the county governments.

According to Ruto, his initial plan was to use the tax hikes to generate about 350bn Kenyan shillings, while about 600bn was going to be borrowed.

The goal of the proposed tax measures was to reduce the debt burden of over $80bn (£63bn).

About 60% of Kenya’s amassed revenues goes to servicing debt, a situation that Ruto was hoping to turn around.

He mentioned other consequences of dropping the finance bill, including the adverse effects that it would have on the employment of 46,000 junior secondary school teachers who have been on temporary contracts, as well as healthcare provision.

He continued that it would be impossible for the government to support dairy, sugarcane and coffee farmers.

It won’t be able to execute its initial plans of settling the debts owed by its factories and cooperative societies.

Even though the bill has been withdrawn, more protests are still being planned for the week, as protesters are asking for better transparency from the government.

There are also resentments over what they perceive as insensitivity by the government to their plight, and the police were accused of unwarranted brutality to the protests.

President Ruto however, stated that the police did their best and that if there is evidence of any wrongdoing, the appropriate actions will be taken.


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