There was just Sh93M in treasury but govt wasn’t broke
By MUNGAI KIHANYA
The Sunday Nation
Nairobi,
25 September 2022
Last week, Nandi County Senator Samson Cherargei said on the Internet
social media that the new government of President William Ruto found
only Sh93.7 million in the national treasury. He proved his case by
sharing a gazette notice dated 16th September 2022 which showed that,
indeed, the balance at the exchequer account was Sh93.7M.
He went further to claim that former President Uhuru Kenyatta had taken
away all the money with him as he proceeded on retirement. This is an
example of how politicians (and, sometimes, lawyers) twist facts to fit
a preferred narrative. The document that Mr. Cherargei shared was simply
a bank statement of the Government of Kenya.
It gives a detailed breakdown of all the money that has been received
during each month and that paid out. One of the payments went to Mr
Cherargei’s own Nandi County: a sum of over Sh559 million!
Any way; it is true that, at the close of business on 31st
August, there was just Sh93.7 million at the exchequer but that should
not worry anyone. The government receives and pays out money
continuously - every day (including Sundays and public holidays).
A big chunk of revenue is received on the 9th day of each month when all
employers remit the Pay-As-You-Earn (PAYE) taxes deducted from
employees’ salaries. Another big sum of money comes in on the 20th
when traders pay the Value Added Taxes (VAT) that they collect from
their customers.
Thus, by the time President Ruto was sworn-in on the 13th of
September, PAYE taxes had already been deposited to the exchequer. And
one week later, VAT landed into the account. The month of September sees
another big sum in the form of Instalment taxes.
Instalment tax is somewhat similar to PAYE but it applies to businesses
whose tax payable was greater than Sh40,000 in the preceding year. [I
think this cut-off needs to raised to Sh100,000 or even higher.] It is
calculated as the previous year’s tax plus 10 per cent and then paid in
four equal instalments in the 4th, 6th, 9th
and 12th month of the business’s financial year – hence the
name.
So, in its first month in office, the new administration will find a lot
of money coming into the national treasury. It has no excuse to not
start implementing its promises right away!
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