Kenya’s finance minister Ukur Yatani on Thursday set a budget deficit of 7.5 percent of GDP for the fiscal year which begins in July, saying the COVID-19 pandemic had disrupted the government’s plan to reduce its reliance on debt.
“Our fiscal consolidation plan has been adversely affected by the events over the last six months,” Yatani told parliament as he presented the government’s budget estimates, while also referring to the impact of the desert locust invasion and flooding.
Yatani said that Kenya’s debt remained sustainable, despite some of the debt burden indicators deteriorating due to the effects of the pandemic which has increased expenditure pressure.
Yatani’s Sh2.7 trillion ($25 billion) budget included a stimulus package to reignite the economy which has been adversely affected by the COVID-19 pandemic.
One of the highlights of the presentation of the budget estimates was the government imposing a one percent minimum tax on revenues for all companies, aimed firms that consistently declared losses to evade taxes.
Meanwhile, tax evaders were given a three-year period to declare their correct taxes to enjoy a waiver on penalties.
