Mil
Treasury is preparing to submit a third supplementary budget for the 2024-25 fiscal year, marking the first time since the Covid-19 pandemic that the budget has been revised three times within a single year.
This adjustment follows major revenue shortfalls, with collections for the first nine months falling by an estimated Ksh 161.9 billion below targets, mainly due to economic slowdowns, social unrest, and the withdrawal of the 2024 Finance Bill, which was expected to generate Ksh 344.3 billion.
Treasury is also facing increased spending demands from new education funding, collective bargaining agreements, and the Universal Healthcare rollout, which combined are expanding the budget deficit projected at 5.1% of GDP (Ksh 887.1 billion).
Previous attempts to raise revenue through new tax laws enacted late last year have underperformed, prompting the government to reconsider ambitious revenue targets and instead focus on improving tax compliance and closing loopholes via digitization.
Economists have criticized overreliance on revenue increases, urging spending cuts to achieve fiscal consolidation.
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