61 per cent of half-year tax revenues eaten up by debt payments
Data now shows that 61.4 per cent of all taxes raised between July and December 2020 or about 61 shillings for every 100 shillings raised by the government was consumed by repayments on debt.
This is according to an analysis of the National Treasury’s statement of actual revenues and net exchequer issues published on Friday.
Debt payments by the government in the period stood at Ksh.413.5 billion from a lower Ksh.416.5 billion at the same stage in 2019.
The repayments as a percentage of revenues would however gobble up more funds from a slump in collections with tax revenues falling by 13.6 per cent to Ksh.673.6 billion.
Pressured by greater expenditure demands the National Treasury resulted in higher borrowing to plug the gap created by lower tax collections.
Total borrowing the period was for instance 50.4 per cent higher at Ksh.425.5 billion from a lower Ksh.283 billion in 2019.
The National Treasury leveraged on easy funding from the domestic market to cover the revenue shortfall tapping Ksh.385.8 billion across six months in contrast to Ksh.258.2 billion a year earlier.
External loans and grants meanwhile stood at a higher Ksh.39.8 billion from Ksh.24.8 billion in 2019.
Greater borrowing helped the exchequer in meeting disbursements to various expenditure heads as the National Treasury endeavoured to keep the implementation of the budget on track.
Recurrent exchequer issues, for instance, were at 43.3 per cent at the half-year stage from 45.9 per cent in 2019 while issues on development were at a higher 39.2 per cent from 26.8 per cent.