Ruto directs all state corporations to remit 80% of their profits
President William Ruto has directed all commercial state corporations to remit 80 per cent of their profits after tax to the National Treasury
President William Ruto has directed all commercial state corporations to remit 80 per cent of their profits after tax to the National Treasury.
Speaking during the meeting with the parastatal heads and CEOs at State House Nairobi on Tuesday, March 26, President Ruto also ordered regulatory institutions to remit 90% of their surplus funds to the Treasury.
Additionally, commercial State corporations must, from now on, remit 80 per cent of their profits after tax to the National Treasury.
“We will give you directions on what to do with the remaining 20 per cent,” the President said.
“There will be no exceptions. Everybody must comply,” President Ruto directed.
The President directed that the government, including State corporations, must live within its means. Consequently, expenditure must never exceed revenues collected.
President Ruto stated, “Our budgets and expenditures must be subjected to rigorous audit to eliminate abuse of public resources. We will leverage on technology to maximise on the value for money and boost service delivery.”
In a renewed profit to increase the government revenues, President Ruto state, “The time is up for loss-making parastatals.”
The president affirmed that state corporations must stop wasteful expenditure, including financing largesse in their parent ministries and unnecessary procurement.
The move to reduce expenditure, he explained, will stop unnecessary borrowing and accelerate the government’s transformation agenda.
“We must get it right. We must do what is right. This is the time,” he added.
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Ruto told the meeting that the government will engage in an elaborate consolidation process that will stop duplicity of functions, wastage and winding up of loss-making institutions.
He cited cases of parastatals that have duplicated and overlapping roles.
“It is illogical. We have to shut down some of these loss-making parastatals. We must end excess capacity,” Ruto said.
Established under the State Corporations Act, state corporations include; Central Bank of Kenya, Kenya Revenue Authority, Insurance Regulatory Authority, Competition Authority of Kenya, and the Retirement Benefits Authority.
In the Consolidated Government Report 2020/2021, internally generated funds by state corporations stood at Ksh677,932 million, while the total transfers and subsidies to state corporations in the same year stood at Ksh377,990 million.
During the same year, profits declared by state corporations increased by a big margin to Ksh37,328 million from a loss of Ksh9,542 million.
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