The National Treasury has announced plans to slash the national budget by over Sh 80 million due to a shortfall in revenue collection.

Treasury Cabinet Secretary Henry Rotich, while addressing the Senate committee on Finance and Budget on Wednesday revealed that the government is facing difficulties financing some of its development projects.

Rotich cited the challenge as the reason treasury has delayed in disbursing funds to the counties. According to Rotich, Treasury has already disbursed Sh134 billion (43%) of the Sh302 billion allocated to counties.
He further revealed a plan to slash the cash allocated to counties by between Sh15 billion and Sh17 billion.

“We have to tighten expenditure for national governments and we need to talk to county governments to institute austerity also. Every institution needs to tighten its belt,” he said.

The government had projected that it could raise a total of Sh1.7 trillion towards funding the Sh2.2 trillion expenditure. KRA was to collect Sh1.5 trillion while ministries, departments and agencies were to collect Sh156 billion in a kitty referred to as Appropriations-in-Aid.

Treasury has blamed the long electioneering period in the run up to the August 2017 elections for the shortfall in revenue collection, saying it slowed down business activities.

“We are running short of revenue. There was a slowdown in business activities because of elections but we are now catching up,” said Rotich.

Rotich added that treasury was in discussion with KRA on how to catch up on the deficit by tightening the tax net on the domestic and customs revenue.