Why Ruto wants an end to Sh22bn inter-agency cases
President William Ruto. He wants an end to Sh22bn inter-agency legal cases.
More than Sh22 billion was at the centre of court cases between different government agencies in the past four years, underling President William Ruto’s decision to direct government agencies to desist from suing each other and instead engage in negotiations.
Most of the cases involved tax disputes and were filed against the Kenya Revenue Authority (KRA), while others concerned tenders and property ownership. Among the agencies fighting other government agencies is the KRA, the Kenya Bureau of Standards, Central Rift Valley Water Development Agency, Coast Water Works Development Agency and the Kenya Tourism Board.
Others were Rift Valley Railways Kenya Limited, Kenya Pipeline Company Limited, Kenya Civil Aviation Authority, Kenya Ports Authority, Telkom Kenya, Sports ministry and county governments such as Kitui, Laikipia and Mandera.
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Last month, Dr Ruto complained that the government was spending huge amounts of money to settle legal disputes at the expense of allocating funds to different development projects.
Legal costs
He warned ministries and departments against suing each other, saying his administration would not incur expenditure to cater for their legal costs.
“All the existing inter-governmental legal cases by one level of government against the other level shall be subjected to Alternative Dispute Resolution. KRA shall withdraw all matters against county governments from court and seek alternative dispute resolution,” the summit that brings together the President and the Council of Governors (CoG) said in a communiqué last week.
One of the major intergovernmental court disputes was between the CoG against the National Treasury in September 2020 over release of the Sh366.5 billion allocated to county governments in that financial year.
Then-Laikipia governor Ndiritu Muriithi and his Mandera colleague Ali Roba (now a senator), in separate petitions, urged court to order the release of the half share to the counties in line with the Supreme Court Advisory that Revenue Bills are time-bound.
In the dispute between Kenya Ports Authority and the Commissioner of Domestic Taxes at KRA, the amount of money involved was Sh1,993,582,700. The battle was so bad that in May last year, KPA was barred from accessing its seven bank accounts over the alleged tax years. The orders barring access to the accounts were lifted after KPA lamented that its operations were at risk of paralysis and shutdown.
The dispute emerged from taxation of money paid by KPA to a foreign company for purchase of crane machines and tag boats.
