NAIROBI, Kenya, March 15 – Vice President William Ruto has pledged to authorize an investigation into a debt of Sh7tn accumulated under the handshake era since 2018, calling government borrowing during the second term of the President Uhuru Kenyatta of unsustainable.
As of December 2021, Kenya’s gross public debt stood at 8.2 trillion shillings compared to the country’s nominal GDP estimated at 10.7 trillion shillings.
While condemning the increase in debt, Ruto pointed out that Kenya has the potential to increase revenue collection through digitization of mechanisms within the Kenya Revenue Authority.
“We believe that debt is the easiest way but we must not be slaves to the debt of any place or country, it will be the last resort, we must develop the economy, we must empower businesses and create opportunities in agriculture so we can raise taxes fund and run businesses based on the money we raise,” he said.
In his speech after being endorsed as the presidential candidate of the United Democratic Alliance (UDA), he assured that his government will ensure that the tax authorities conduct their affairs independently and professionally.
“We will professionalize the systems within KRA, digitize them and make sure the agency collects the taxes well and for the 60% not collected as VAT, we will create mechanisms and collect the taxes, we don’t have not to fight Kenyan businesses and destroy people while collecting taxes,” he said.
He claimed the tax agency had been seized by the government, but promised to release it and turn it into a professional entity that would carry out its work without state interference.
“Our tax collection has stagnated because of conflict of interest, lack of concrete plan but our movement will create a concrete plan for us to increase the tax base, reduce borrowing which can cripple our economy,” he said. he added.
Ruto explained that his government will focus on saving Kenyans, which improves local borrowing.
“We will create an overall environment for Kenyans to save, many countries have savings of up to 40% compared to our 7% rate,” he lamented.
Ruto, during his tour of London a week ago, said his administration would change National Social Security Fund (NSSF) contributions which are currently Shs 200 for all Kenyans by setting a standard of five per cent for everyone’s income.
By doing so, DP said the savings in funds will be large enough to contain resources that will allow the government to easily source and finance development projects.
“The money we borrow is savings for other countries and we pay with interest, we borrow everyone’s money except our own. we need to be able to build a huge fund to be able to borrow and finance our activities,” he added.
He has also pledged to initiate a diaspora bond that will allow Kenyans living abroad to lend money to the government at an interest rate of seven percent.
“We will make sure that instead of keeping money in the bank here (abroad) and getting zero interest, we can give you 7% interest at home, having an obligation to the diaspora where you can put your money, you will help the government with money to run programs,” he said at a forum after arriving in London where he was received by senior officials -Kenya Commissariat headed by High Commissioners Manoah Esipisu.