Senators and CRA clash over sharing of revenue
Senators during a past sitting in Nairobi.
Senators are headed for a major clash with the Commission on Revenue Allocation (CRA) over its proposed quotas to counties in equitable revenue share for the coming financial year.
The development comes after the CRA proposed Sh396.05 billion as allocation to counties for the fiscal year ending June 2025.
However, senators have questioned the proposed allocation to the 47 devolved units, saying, it is way below the proposal the agency had put out for the current financial year.
In its submission to the National Assembly’s Budget and Appropriations Committee last month, the agency that is chaired by Ms Mary Chebukati recommended that the allocations to counties be increased to Sh407 billion from the current Sh385.4 billion.
In the proposal, the funds would comprise Sh396.05 as equitable revenue and Sh10.95 in conditional grants.
In the new proposal, CRA wants Sh11.37 billion to go to counties from the Road Maintenance Levy Fund and some Sh8.37 billion set aside for the Equalisation Fund.
“The allocation of Sh396.05 billion is equivalent to 23.7 per cent of the most recent audited and approved accounts,” said Ms Chebukati.
But a section of senators are threatening to reject the revenue allocation proposal on the basis that it represents a marginal increase from the current allocation despite a projected rise in revenue collection by the national government.
Nairobi Senator Edwin Sifuna said the Senate will go through CRA’s recommendation with a fine-tooth comb and will reject it “if it does not make sense”.
He termed as illogical the fact that the proposed allocation was lower than the Sh407 billion the CRA wanted to go to counties in the current fiscal year.
“We need to know the reasoning behind the CRA’s proposal because that figure is lower than what we were pushing for in the current financial year which was based on their recommendation,” said Mr Sifuna.
Mr Sifuna said the Finance and Budget Committee had its work cut out for it, urging it to take the CRA to task on the proposal before presenting their report to the whole House for a final vote.
Vihiga Senator Godfrey Osotsi vowed to rally like-minded senators to reject any equitable revenue allocation that is below Sh400 billion.
He termed as strange the fact that CRA had proposed Sh407 billion in the current fiscal year but is now proposing Sh396 billion next financial year.
“CRA is proposing a lower allocation for the coming financial year, and we want to know the reasoning behind it as it is coming at a time when revenue collection is projected to increase,” said Mr Osotsi.
“The final decision lies with the Senate. It’s time for senators who voted to give the counties less money in the current financial year to redeem themselves,” he added. He alleged a move by the national government to hold onto some devolved functions and the billions meant to perform them.
Senators allied to the Azimio la Umoja One Kenya Coalition Party had last year vehemently opposed the Sh385.5 billion that was fronted by the National Treasury, but they were outnumbered by their Kenya Kwanza counterparts.
CRA’s proposal will mean counties get an additional Sh21 billion in the financial year ending June 2025 . The agency had proposed an allocation of Sh407 billion in the current fiscal year.
But the figure was revised downwards after Kenya Kwanza-allied senators voted to give the counties Sh385.45 billion, inclusive of Sh405 million for library services for select counties.
The Council of Governors (CoG) opposed the proposal and pushed for an allocation of Sh425 billion. However, their push did not sail through. The CoG is again pushing for additional allocation on top of the Sh425 billion they demanded for the current fiscal year.
It has been reported that the CoG is involved in negotiations over the allocation of funds in order to find a middle ground. The governors also want CRA to work on the formula for sharing benefits from natural resources.
Since inception, the commission said, counties have collected a paltry Sh344 billion, with a number of them only attaining 64 percent of their targets.
Equitable share allocation has always been a source of friction between the national government and the devolved units.
About two years ago, the two levels of government were embroiled in a tussle over the level of allocation until former President Uhuru Kenyatta intervened, pledging Sh53.5 billion more to counties to break the impasse. This saw the allocation increase from Sh316.5 billion in the financial year ended June 2021 to the current Sh370 billion, ending the stalemate that gripped the nation during the debate on the third basis of revenue sharing formula.
