Take Sh380 billion or leave it, MPs tell governors
The National Assembly during a past session.
Members of Parliament have told counties to take Sh380 billion as shareable revenue or leave it saying the country suffered low projection of revenue collection due to the rejection of the Finance Bill, 2024/25
The lawmakers, while unanimously adopting the report of the Budget and Appropriations Committee that allocated Sh380 billion to counties as approved in the Division of Revenue Bill, 2024, said governors cannot get the Sh400 billion as proposed by senators.
The MPs slammed counties and senators for insisting on Sh400 billion as shareable revenue despite being aware that the country suffered revenue shortfall of Sh346 billion that was to be collected if the Finance Bill, 2024 had been enacted.
The bickering between the two Houses over the amount is likely to worsen the financial situation in counties that have not received money from the treasury as of August.
National Assembly majority leader Kimani Ichung’wah said theshortfall necessitated by the rejection of the Finance Bill was to have consequences that were to be borne by both levels of government.
“Revenue of Sh346 billion that was to be accumulated from that Bill is not available today and this had an effect on the economy. It’s foolhardy for the Senate to argue that what was projected at the time of doing the division of revenue must suffice and the national government must provide resources to bear the entire loss of the Finance Bill,” Mr Ichung’wah said.
Mr Ichung’wah told counties that they are not the only ones bearing the burden occasioned by the rejection of the Finance Bill.
“The national government is bearing Sh326 billion out of the Sh346 billion, we are only asking counties to bear Sh20 billion among the 47 counties which translates to about 380 million per county, this is money they can survive without,” Mr Ichung’wah said.
“Should we be able to recover some of the tax measures we had in the course of the year and generate more revenue, nothing stops us from re-appropriating monies again to counties,” Mr Ichung’wah said.
He told counties that besides the shareable revenue that they get, there are also conditional allocations that have not been affected.
“It’s only the equitable share that has been affected by 20 billion and we are asking them to sacrifice because of the [problems that we ran into,” Mr Ichung’wah said.
Kitui Central MP Makali Mulu said the Sh400 billion proposed by Senators cannot be accommodated during this financial year.
“This is not a normal year, it’s a year we are faced with challenges as a country because the Finance Bill was rejected and the projected revenue could not be collected,” Dr Mulu said.
Baringo North MP Joseph Makilap told senators and counties to be realistic on the country’s current financial position in demanding for the Sh400 billion as shareable revenue.
“County governments are not able to get their share because the Finance Bill was rejected. That is the reality and the Senate must be a live to the reality rather than having amounts in figures and no resources to implement the program,” Mr Makilap said.
“It is in the public domain and that of governors that the revenue targets will not be realised and it’s therefore prudent that we cannot budget for resources that we cannot raise,” he added.
Kesses MP Julius Ruto said theprojected revenue of Sh380 billion proposed by the National Assembly was made based on the revised revenue raising measures after rejection of the Finance Bill.
“The revenue that is now being projected is way below the Sh346 billion that was to be collected. It is the right time for the county government to rise to the occasion and realise we are one country and we don’t have other space for raising revenue other than to live within our means,” Mr Ruto said.
Senators unanimously endorsed the amendment by the Senate Finance and Budget committee arguing that they will take nothing less than the Sh400.1 billion earlier approved in the Division of Revenue Act, 2024
The National Assembly has however argued that following the rejection of the Finance Bill 2024/25, it is only fair that both levels of the government bear the reduction in expenditure equitably.
The lawmakers pointed out to counties that it’s only Sh20 billion reduction that they will suffer which translates to 5.8 percent, while the national government is losing 12.83 percent of what was projected as revenue that was to be collected.
The Division of Revenue Act, 2024 was revised to cut budgetary expenditure following the collapse of the Finance Bill, 2024
President William Ruto in June this year rejected the Bill following sustained pressure from protesters led by the young people.
The government was banking on the passage of the Bill to raise Sh347 billion in the financial year 2024/2025 to plug the deficit on the government’s Sh3.92 trillion
Following the stalemate between the two Houses, the Bill now be subjected to a mediation committee.
If within 30 days, a team appointed by speakers of the respective houses fails to agree, then the Bill will stand defeated and a new one will have to be published, a move that will further worsen the financial situation in the devolved units.
