This has been done after the ministry on Thursday published a new Bill that prohibits the county bosses from instituting taxation measures without Treasury’s approval at least 10 months before.
The Bill, phrased as the County Governments Tax Regulations Process Bill 2016, requires the county executive for finance, within 10 months after the commencement of the financial year, to submit tax proposals to the Cabinet Secretary for National Treasury for approval, setting out the reasons for the imposition of the tax, fee, levy or charge.
It also requires compliance with Article 209(5) of the Constitution and where appropriate, describe the persons liable for the tax, fee, levy or charge and any relief measures or exemptions.
“The Bill, if passed, would allow for better supervision and implementation of policies at the county level and the process for approval of plans and policies for smooth operation and management of resources by the County Governments,” said Mbiki Kamanjira, a manager at tax advisory firm Grant Thornton.
New platform
The proposed law has also specified that any taxes that were previously introduced by the county bosses in their different realms will now have to be restructured to comply with it, and the Finance CS will be in charge of coming up with regulations on how the new law will be implemented.
Mr Kamanjira said if adopted into law, the Bill will set up an entirely new platform where the National Government can challenge tax decisions made by counties, even if governors are empowered by the Constitution to introduce their own taxes.
Exercise sovereignty
“In summary, the main objective of this Bill is to provide the framework for the direct exercise of sovereignty by the County Governments through actively informing the form and content of legislation and policies - though now they must seek approval from the Treasury,” he Kamanjira.
In their first term in office, governors dismayed everyone by the tenacity with which they went about introducing new taxes and waiving levies, much to the chagrin of the National Government.
Nairobi Governor Evans Kidero, for instance, shocked motorists by increasing parking fees, while residents of Kiambu County moved to court to nullify a controversial Bill seeking to introduce new taxes by Governor William Kabogo who wanted landlords to pay more to his administration.
