Treasury proposes budget cuts for Ruto, Gachagua, Musalia

Rigathi Gachagua, William Ruto and Musalia Mudavadi

Deputy President Rigathi Gachagua (left), President Dr William Ruto and Prime Cabinet Secretary Musalia Mudavadi at State House in Nairobi on September 27, 2022.

Photo credit: File | Nation Media Group

The National Treasury has asked the budget committee to cut allocations for the three senior officials of the Kenya Kwanza government for the new year, even as it sought an extra Sh17 billion for the current year.

Funds slashed from the Executive Office of the President, Office of the Deputy President, the Prime Cabinet Secretary and State House will instead be re-allocated to the coffee reforms, the tree planting programme, enhancement of the budget for foreign missions and state visits.

The Treasury also wants the Budget and Appropriation Committee led by Kiharu MP Ndindi Nyoro to use the funds to rein state budget cuts for SAGAS and plug the shortfalls for education, security, governance and justice sectors.

“Mr Chairman, during the finalisation of the FY 2024/25 Budget Estimates, MDAs (Ministries, Departments and Agencies) budgets were reduced in line with the revised Fiscal Framework. Further to the rationalisation and subsequent submission of the FY 2024/25 Budget Estimates, we intend to review and rationalise the following votes,” said Dr Kiptoo.

These four areas have been allocated a total of Sh20.88 billion, with the highest beneficiary being State House with a budget of Sh9.49 billion. The Executive Office of the President has a budget of Sh5.37 billion, Office of the Deputy President (Sh4.87 billion), and Office of the Prime Minister Sh1.14 billion.

Dr Kiptoo, however, did not disclose by how much these budgets would be reviewed.

This comes against the backdrop of increased taxation in the Finance Bill 2024 amidst reports of wastage and extravagance, including the President chartering a Sh100 million private jet for his four-day State Visit to the US.

Allocated Sh900 million

The Treasury had allocated Sh900 million to offer State House, Nairobi, a facelift, making it the largest upgrade of the 117-year-old building. This is an increase from Sh795.4 million that has been allocated to the State House in the current fiscal year ending next month.

Another Sh500 million will be spent on the construction of buildings, Sh250 million on refurbishment, ICT equipment (Sh100 million) and Sh50 million for the purpose of specialisation.

Mr Gachagua’s office is also set for renovation having been allocated Sh2.6 billion, with lawmakers taking issue with the spending plan. The DP’s office has also been allocated Sh2.5 million for the purchase of household appliances, Sh375 million for the purpose of office furniture and fittings and Sh2 million for the purchase of education aids and related equipment.

Others include Sh87 million for the purchase of ICT networking and communication equipment, Sh2.1 million for laundry expenses, Sh5 million for counselling services, Sh56 million for travel allowances, Sh91 million for accommodation, Sh17 million for entertainment allowance, Sh520,000 for gas expenses Read:  Gachagua’s allocation beats President Ruto’s in Sh187bn mini budget

The increased allocations to these offices comes at a time when the Treasury is set to introduce VAT on bread and increase excise taxes on M-Pesa, airtime and bank transfers, spirits and cigarettes as it seeks to raise an additional Sh323 billion in taxes in the financial year that starts in July.

President William Ruto’s administration avoided imposing new payroll taxes to avoid angering some individuals and groups who last year challenged the tax measures in court.

Households, however, will pay 16 per cent value added tax (VAT) on bread in a move that will see the cost of the commodity increase by at least Sh10 for a 400-gramme loaf.

The 2024 Finance Bill is also introducing a new motor vehicle circulation tax that will see motorists cough up to Sh100,000 annually to keep their vehicles on the road.

The Bill proposes to raise the taxes levied on motorcycle imports, betting, payment from government supplies or tenders and whiskies.

Overall, the government is targeting tax collections of Sh2.94 trillion in the next fiscal year, up from Sh2.62 trillion in the current year.