World Economy

IMF Faults Kenya on Expenditure Records

IMF Faults Kenya on Expenditure RecordsIMF Faults Kenya on Expenditure Records

Nearly half of Kenya’s public sector expenditure goes unreported in fiscal documents compiled by the government, making it difficult to track the diversion of funds released to State corporations, a new report by the International Monetary Fund says, AFP reported. The report, covering the 2012-2013 financial year, says a substantial amount of the expenditure incurred by parastatals and other state agencies is not captured in key fiscal reports. The IMF says this leaves 44% of public sector expenditure unreported. The government also fares poorly in the reporting of tax expenditure, especially in documenting the amount the Kenya Revenue Authority foregoes through tax waivers. This is in spite of studies done by the KRA and the World Bank showing that tax holidays amount to an estimated 2.5% of GDP. Kenya produces regular fiscal reports. They include the treasury’s quarterly economic and budgetary reviews and the monthly exchequer account flow statement, the central bank’s statistical bulletin and the Controller of Budget’s quarterly budget implementation review reports covering the national and county governments.