Jubilee Government raises share of cash to counties, ruffles feathers with promise to deal double taxation

Treasury has increased the shareable revenue to the 47 counties.

However, the government seemed set on a collision course with the devolved units after it accused them of double taxation.

Cabinet Secretary Henry Rotich allocated a total of Sh329 billion to counties, an increase of 35 per cent of the most recently audited revenues approved by Parliament.

He also took a swipe at counties for taxing businesses even after the national government had done so.

The minister said this was not only unconstitutional but also discouraged investment.

Counties have been taxing businesses set up in areas under their jurisdiction in addition to the taxes imposed by the national government.

The result was a double-taxation regime that has seen many businesses either fold or struggle to pay.

According to Mr Rotich, this was not only unconstitutional but also a major impediment to much-needed investment in the counties.

"Mr Speaker, we are aware of complaints from our business community of double taxation of their activities by county governments. This is not only bad for our investment climate but is also a violation of Article 209 of our Constitution," said Rotich.

County revenues

He said he would soon introduce proposals in Parliament to stipulate how county governments may raise revenues without violating the Constitution and raising the cost of doing business.

The Government plans to raise about 1.76 trillion through taxes and appropriation-in-aid from the various ministries, departments, and agencies.

County governments will receive Sh291.1 billion, an increase from the Sh280 billion given to them last year.

The Government gave Sh23.9 billion in additional conditional allocations to county governments.

This included Sh4 billion in conditional grants for Level 5 hospitals and Sh200 million Special Purpose Grant to support emergency medical services in Lamu and Tana River counties, which the minister said were vulnerable to terrorist attacks.

Free maternal health care was allocated Sh4.1 billion while Sh900 million went to conditional grant to compensate counties for foregone user fees which were abolished. Sh4.5 billion was allocated to leasing medical equipment.

Sh4.3 billion was allocated for the Road Maintenance Fuel Levy Fund.

Five counties also received Sh605 million to construct their headquarters