The government has moved to enforce a deadline on the passage of Finance Bills by the counties to plug a loophole that has seen the devolved units miss out on revenue.
A State-backed amendment to the Public Finance Management Act, if adopted by Parliament will insert a new clause into the law that will compel the 47 county assemblies to pass Finance Bills by June 30 every year.
The deadline is meant to allow counties to collect levies and fees at the new rates set in their Finance Acts and ensure that they do not miss out on revenue.
Currently, the county assemblies do not have a deadline on when to pass their Finance Bills, with some passing the them six months after the beginning of the financial year.
This denies the county governments revenues given that they cannot backdate fees and levies in case of higher rates in their Finance Acts.
“The principal Act is amended by inserting the following new section immediately after section 131— The County Assembly shall consider and pass the County Finance Bill, with or without amendments, in time for it to be presented for assent by 30th June each year,” reads the Bill proposed by Leader of Majority Kimani Ichung’wah.
This will require the county executive committee member for Finance to table the Finance Bill before the county assembly by April 30 for debate and approval by end of June 30.
Counties have since the start of devolution performed dismally in raising own revenue due to delays in passing the Finance Bills, corruption among revenue officers and failure to automate payment systems. For example, in the year ended June 30, 2023 they raised Sh37.81 billion, representing 65.9 per cent of the Sh57.37 billion target.
Mr Ichung’wa’s amendment, if adopted, will see the county governments play in the same space as the national government in terms of enforcing revenue raising measures as passed in the Finance Act.
Currently, Parliament is required by law to pass the Finance Bill and have it signed into law by the President by June 30 every year, paving the way for enforcement of all revenue raising measures including new taxes from July 1, when the financial year starts.
