The National Treasury has reduced the 2024–2025 Financial Year (FY) budget by Kes 273 billion, owing to a decline in revenue collection.

This indicates that the Ministry will cut expenditure from Kes 4.188 trillion to Kes 3.92 million starting on July 1, 2024.

According to official data from KRA, tax collection in the past eight months amounted to Kes 1.37 trillion, less than half of the original revenue target of Kes 2.49 trillion.

In a letter to Parliament, The National Treasury pointed out that the move would contain borrowing and rationalize expenditures to sustainable levels.

“Given the revision of the projected revenues, the FY 2024/2025 budget estimates have been reduced by 273.3 Billion from the approved 2024 BPS. The overall total gross expenditure estimated for FY 2024/2025 is projected at KSH 3,914.9 Billion.”

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The proposed expenditures include Kes 2.24 trillion for the executive, a recurrent allocation of Kes 1.52 trillion and a development allocation of Kes 724.4 billion.

The consolidated Fund Services (CFS) are set to receive Kes 1.21 trillion, which will include allocations to cater for domestic interest payments of Kes 749.9 billion, foreign interest payments of Kes 259.9 billion, and pensions, salaries, and allowances of 203.6 billion.

The county governments are set to receive Kes 391.1 billion, excluding additional allocations of Kes 54.9 billion, including loans and grants.