Why Treasury has revised projected revenue collection for 2020/21

Thursday, May 21st, 2020 00:00 |
Principal Secretary Julius Muia.

Zachary Ochuodho @zachuodho

National Treasury has revised its revenue collection to Sh1,870.5 billion for the year 2020/21 down from what it had earlier been indicated in the 2020 Budget Policy Statement (BPS) and even in the Supplementary II budget.

 The revision is in line with the revised revenue projections for  financial year 2019/20 collection trends, reduction in tax rates (PAYE, Corporate and VAT) and takes into account impact of the Covid-19 pandemic.

  The projection indicates that the government aims to collect Sh1, 870.5 billion down from Sh2, 134.1 billion in the 2020 and Sh1, 892.8 billion in Supplementary II budget.

 Principal Secretary Julius Muia who appeared yesterday before the National Assembly’s Committee on Finance and National Planning said the impact of the Covid-19 pandemic has forced them to revise their projection.

Total revenue

 “The total revenue is projected to decline at (-1.2) per cent annually while ordinary revenue is projected to grow by a mere 1.3 per cent. The projected revenues of Sh1870.5 billion are expected to finance the expenditure estimates in the FY 2020/21 Budget,” Muia said.

 He assured members of the National Assembly that the revenue projections for FY 2020/21 are realistic and reflect the policy and Covid-19 Impact.

Muia, however, warned that the situation of coronavirus could worsen the revenue collection in the remaining quarter of financial year 2019/20 and the projection for financial year 2020/21.

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