Home Business State firms incur Ksh 11.8B in penalty interests from unpaid bills

State firms incur Ksh 11.8B in penalty interests from unpaid bills

A road under construction. PHOTO | File

Taxpayers will have to pay additional Ksh 11.8 billion in penalty interests arising from unpaid bills held by various state corporations and agencies.

According to the National Government Budget Implementation Review Report for the first six months of the 2023/24 fiscal year to December 2023, penalty interests saw pending bills rise by 11.6pc to Ksh 447.3 billion from Ksh 400.7 billion reported over the same period in 2022.

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“The State Corporations’ pending bills include payments due to contractors/projects, suppliers, unremitted statutory and other deductions, and pension arrears for Local Authorities Pension Trust. The highest percentage of the State Corporations’ pending bills (Kshs.209.42 billion as of 31st December 2023) was for Contractors/ Projects (Development),” said CoB.

During the period under review, the report by the Controller of Budget also reveals that total National government pending bills also rose 12pc.

“The total outstanding National government pending bills as of 31st December 2023 amounted to Ksh 538.82 billion, compared to Ksh 481 billion reported on 31st December 2022,” stated CoB.

Of the total outstanding bills, State Corporations make up 83pc while Ministries, Departments and Agencies (MDAs) make up 17pc or Ksh 91.2 billion.

MDAs’ pending bills are mainly historical pending bills comprising Kshs.62.9 billion (68.83per cent) for recurrent expenditure and Kshs28.51 billion (31.16 per cent) for development expenditure.

In the first six months of FY 2023/24, the amount paid for pending bills by MDAs was Kshs.29.69 billion, comprising Kshs.23.64 billion for recurrent and Kshs.6.05 billion for development expenditure.

The office has also flagged Ksh 5.61 billion which will be ineligible for clearance.

The National Health Insurance Fund (NHIF) registered the highest increased in outstanding bills at 155.9pc in six months after surging to Ksh 87.7 million from Ksh 33.9 million in June last year.

State agencies under the Ministry of Roads and Transport held the highest stock of pending bills with Ksh 178.4 billion out of which Ksh 5.6 billion was in interest penalties.

State corporation under the Ministry of Energy and Petroleum followed by the amount of outstanding bills at Ksh 87.6 billion out of which Ksh 2.9 billion was penalty interest while institutions of higher learning under the ministry of Education had pending bill amounting to Ksh 62.9 billion out of which Ksh 7.3 billion was for penalty interest.

State corporations under health ministry reported pending to the tune of Ksh 20.6 billion comprising Ksh 19.2 billion as principal amount and Ksh 1.5 billion as penalty interest.

“The category of pending bills with the highest increase under State Corporations was the National Health Insurance Fund that increased by 155.9PC from Kshs.33.89 million as of 30th June 2023 to Kshs.87.73 million as of 31st December 2023,” CoB noted.

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