President was wrong to sign Division of Revenue Act

By Kethi Kilonzo

NAIROBI, KENYA: The passing of the Division of Revenue Act was unconstitutional. The differences between the National Assembly and the Senate over the sharing of revenue between the national and county governments should have been referred to a mediation committee of both Houses. The Bill could only have been lawfully assented to by the President if there was consensus between the two Houses. In setting out and defining the role of Parliament, Articles 94, 95 and 96 of the Constitution indicate that Parliament is a shared institution. The National Assembly represents the broad national interests and the people of Kenya. The Senate represents the counties, their governments and interests. The Senate participates in the law-making function of Parliament by considering, debating and approving Bills concerning counties.

The Constitution defines Bills concerning counties as Bills with provisions that affect the functions and powers of the county governments; that relate to the election of members of the County Assembly or county executive; and that affect the finances of county governments.

In the area of finances, the Senate has power to determine the allocation of national revenue among counties, and to exercise oversight over such allocations. At first glance and read alone, Article 96 (3) may mislead one to think that it precludes the Senate from the annual sharing of revenue between national and county levels of Government. The role of the Senate in the sharing of revenue between the two levels of government is provided for under Article 218 which requires that the Division of Revenue Bill and the County Allocation of Revenue Bill are introduced in Parliament at least two months before the end of each financial year. The article provides for the introduction of the two Bills in Parliament and not just in one of the two Houses of Parliament.

The Constitution makes it mandatory for Parliament to enact such laws as will ensure that county governments have adequate support to enable them to perform their functions. Before either House of Parliament considers a Bill, the Speakers of both Houses should jointly resolve the question whether it concerns counties.

If a Bill is introduced in both Houses a presumption arises that both Speakers have agreed that the Bill concerns counties. If both Houses are unable to agree on the Bill, it cannot be sent to the President for assent. It must be referred to a mediation committee of both Houses. If the committee fails to agree on contents of the Bill it is defeated. Though the National Assembly has the responsibility to allocate national revenue between the national and county governments, this is a matter that concerns counties, and the Senate has an oversight role under the law.

The Government in October 2010 established the Task Force on Devolved Government. The Task force was to work on implementation of the devolution process and to advise the Government on policy and legal frameworks for devolving power, resources and responsibilities to Kenyans for effective local development. Among other things, the Task Force advised the Government on the role of Senate in the passing of Financial Bills. According to the Report, the Division of Revenue Bill is one that concerns counties and the Senate has a mandate to participate in its passing.

If there was any doubt whether the passing of the Division of Revenue Act offends the Constitution, this Report lays that doubt to rest. The Report should be pulled from Government shelves, dusted, and made compulsory reading.