Landlords, gamblers in President Ruto’s crosshairs

Landlords and gamblers are on the radar of the taxman as President William Ruto plans to focus heavily on the real estate and betting sectors to achieve the Sh3 trillion revenue collection in the next financial year.

The National Treasury says as the government targets to grow revenues from 17.3 per cent of GDP in the current FY to 17.8 per cent in 2023/24, among reforms that have been lined up, are mapping out all rental properties and integrating Kenya Revenue Authority (KRA) systems with the betting sector.

This will see thousands of landlords who currently don’t pay taxes netted by the taxman, and the new administration deepens control over Kenya’s betting industry.

“The National Treasury, jointly with the KRA, is making improvements on tax administrative measures in order to ensure revenue collection remains on target. These include implementation of a new web-based improved VAT system, integration of KRA system with the betting sector and mapping of rental properties,” said Treasury Principal Secretary Chris Kiptoo.

This, Treasury said yesterday as it launched public hearings for the 2023/24 Budget and the Medium Term Preparations, will be done even as the new administration pursues the National Tax Policy, whose development is said to be at an advanced stage.

Control recurrent spending

To lower the budget deficit from the current year’s 6.2 per cent to 4.3 per cent in 2023/24 and slow accumulation of debt, Treasury said it plans to control recurrent spending on such items as travel, training and hospitality classified under Operations and Maintenance, which cost the government Sh1.4 trillion in 2021/22.

“The government will continue to restrict growth in recurrent spending through cutting down on non-priority expenditures. In this regard, expenditures as a share of GDP are projected to decline from 23.3 per cent in FY 2022/23 to 22.4 per cent in the FY 2023/24 and further to 21.7 per cent in the FY 2025/26,” Treasury stated.

For the 2023/24 Budget, President Ruto’s government says it wants to pursue a “growth-friendly” fiscal consolidation to preserve debt sustainability.

“This will be achieved through enhancing revenue collection and suspending expenditures in some recurrent areas,” Treasury stated.

Treasury CS Prof Njuguna Ndung’u said the new administration will rely on the bottom-up model to drive economic recovery, focusing on protecting private investments, developing, regulating and protecting markets, and building digital solutions.

“The Bottom-Up Economic Transformation Agenda will seek to increase investments in at least five sectors envisaged to have the largest impact on the economy as well as on household welfare. These include agriculture, micro, small and medium enterprises, housing and settlement, healthcare, and the digital superhighway and creative industry,” the CS said.

He added that the government plans to lay emphasis on aggressive revenue mobilisation, including making policy changes.

Seal loopholes

The CS relayed President Ruto’s plans to overhaul the management of government projects in order to seal loopholes, with those leading them being required to account for failure or delay.

“The proposals have also adopted the programme performance-based budgeting; it puts emphasis on the management of public resources for results. This has, at the same time, increased the need for greater accountability from managers of public resources who will from time to time be called upon to explain the manner they implemented government programmes, the constraints they faced and the remedial actions they intend to take,” the CS said.

National Assembly Budget and Appropriations Committee chairman Ndindi Nyoro said Parliament will curb the Treasury’s trend of coming up with several supplementary budgets by protecting key programme allocations that revised budgets must not touch.