Finance Committee Engages Central Bank Of Kenya And Kenya Revenue Authority Over Kenya’s Economic Outlook
By PSCU
Worth Noting:
- The chairman, Kuria Kimani sought to know what measures Uganda and Tanzania had put in place to register growth in their economy.
- In his closing remarks, the Governor indicated that the implementation of medium to long term measures to attract more forex inflows as well as improving competitiveness to encourage more export of goods, market diversification in addition to trade facilitation and address any speculative activity on forex trading in the banking sector, would offer a long term remedy.
- Later in the afternoon, the Kenya Revenue Authority (KRA) met with committee to submit the performance of revenue collection for the 1st Quarter of the Financial Year 2023/2024.
The Departmental committee on Finance and National Planning yesterday held two crucial sittings to review the country’s economic performance. First to appear before the committee was the Governor of the Central Bank of Kenya (CBK), Dr. Kamau Thugge whom the committee had sought a brief from with relation to foreign exchange market developments.
The meeting came in the wake of CBK’s indicative rate published on Monday this week, had showed the dollar’s buying price at Ksh149.84 with a selling rate of Ksh150.04 units, averaging at Kshs. 149.94.
In his presentation, Dr. Thugge while apprising the lawmakers on the decline of the value of the Kenyan shilling against the dollar and other major currencies, noted that most African currencies have weakened against the US Dollar comparatively reflecting the strengthening of US Dollar around the globe due to policy tightening in major economies.
In order to support the Shilling going forward, the Governor proposed a raft of measures including interbank market reforms, deliberate measures to improve forex inflows, improvements of sentiments around the Eurobond and debt issues, and narrowing current account deficit especially on reduced imports and strong exports. He also observed that strong remittances and diverse tourism in addition to the traditional tourism would also help alleviate the challenge.
While comparing the Kenyan situation with that of some of the East African Countries, he pointed out that while Kenya is performing well in migrant workers’ remittances, Uganda has been attracting more foreign exchange while Tanzania’s relatively good performance is attributed to tourism receipts.
However, the members expressed serious concerns over the cause of devaluation of the Kenyan Shilling against the US Dollar and urged the bank to expeditiously develop measures to protect the Kenyan currency.
The chairman, Kuria Kimani sought to know what measures Uganda and Tanzania had put in place to register growth in their economy.
In his closing remarks, the Governor indicated that the implementation of medium to long term measures to attract more forex inflows as well as improving competitiveness to encourage more export of goods, market diversification in addition to trade facilitation and address any speculative activity on forex trading in the banking sector, would offer a long term remedy.
Later in the afternoon, the Kenya Revenue Authority (KRA) met with committee to submit the performance of revenue collection for the 1st Quarter of the Financial Year 2023/2024.
The Commissioner General, Mr. Humphrey Wattanga told the members that there has been a registered positive growth whereby the total revenue collection in the period of July to September 2023 resulted in a performance rate of 88.1 per cent.
He further submitted that domestic taxes had translated to a performance rate of 90.3 per cent while the performance rate of customs and border control was at 84.0 percent which was a significant decline of 2.7 percent.
In addition, he noted that there was a boost in increased remittance from Public Sector registering a rise in performance of Withholding Income Tax while Pay As You Earn (PAYE) had realized a growth of 11.2 per cent driven by enhanced receipts from private sector firms.
At the same time, the committee heard that compliance realized from e-Tims implementation had registered a growth of Domestic VAT while Corporation Tax and Oil Revenue registered a decline.
Additionally, Mr. Wattanga expounded on strategies implemented to enhance revenue collection like tax amnesty, real time collection of taxes, full rollout of e-Tims, integration of other Government agencies among others.
He cited taxing the informal sector, huge debt portfolio, pending bills, huge amounts of Treasury undertakings and undervaluation of import cargo as among some of the obstacles the Authority has encountered in the process of collection revenue.
The members enquired if the recently recruited Revenue Field officers had made a significance in terms of growth especially from businesses that were not paying taxes previously.
Members also sought to know the impact of the expansion of the tax base They also noted that underfunding had hindered the Authority from performing optimally with regard to revenue collection.
Kimani urged the team to develop a curriculum in conjunction with other relevant government agencies to ensure that all Kenyans are sensitized on payment of taxes.
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