MPs back Uhuru’s hardline stance as revenue row rages

CoG Chairman Wycliffe Oparanya and Kisumu Governor Anyang’ Nyong’o during the council’s meeting at Sarova Woodlands Hotel in Nakuru on Thursday. [Harun Wathari, Standard]
The National Assembly has backed President Uhuru Kenyatta’s hard-line stance on the proposed additional Sh19 billion to counties as governors vow not to relent on their demand.

The president and the National Assembly have maintained that Sh316 billion be shared equally among the 47 counties, while Senate and governors are demanding Sh335 billion, up from the Sh310 billion contained in the collapsed Division of Revenue Bill.

The National Assembly leadership led by Majority Leader Aden Duale (Garissa Township), Minority Leader John Mbadi (Suba South) and Junet Mohammed (Suna East) accused the Senate of dishonesty for lobbying for more funds to the counties while the country grapples with more than Sh200 billion deficit for recurrent expenditure.

Head of Public Service Joseph Kinyua has further complicated matters after he directed State entities to align financial processes with the 2019/2020 budget.

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Mr Mbadi explained that Sh836 billion is for recurrent expenditure for the national government while Sh316 billion goes to counties.

He said recurrent expenditure stands at Sh718.8 billion, meaning there is a deficit of Sh212 billion.

“The harsh reality and this is a lie we have lived as a country for long is that we are borrowing money for recurrent expenditure. Therefore, whoever thinks or has been peddling rumours and propaganda that there is enough money in the country to cover all the recurrent expenditure, pay all our debt and to give to counties is wrong,” Mbadi stated.

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“Unless as a country we reduce the recurrent expenditure drastically, maybe by half, and reduce debt-repayment, which is an obligation that is permanent and we can’t change. I don’t know.”  

Taking the biggest chunk

The MPs dismissed assertions by senators and governors, questioning why we have a Sh3.01 trillion budget and only Sh 317.5 billion is going to counties.

“We are just projecting as a county. A projection that will never be realised. We are projecting to collect Sh1,877 trillion. This is the projection CRA and everybody is basing their arguments on,” said the National Assembly Minority Leader.

He argued: “There are certain expenditure that are inflexible. Such expenditure will always be met. If we remove from the projected amount the public debt of Sh586 billion, then you remove Constitutional Commission funds totaling Sh261 billion with Teachers Service Commission taking the highest chunk Sh252 billion, the figure is not enough.”

Mbadi noted that CFS, which is pensions and salaries Sh109 million, Parliament and other independent organs Controller of Budget, Auditor General, Director of Public Prosecution (DPP) and Judiciary Sh73 billion,

Emergencies and equalisation fund Sh12 billion, all total to Sh1,041 trillion.

“You are remaining with Sh836 billion, out of that take away the Sh330 billion we are giving counties, you will remain with only Sh506 billion,” he said.

He said according to the Appropriation Law, the public debt stands at Sh586 billion.

Budgets and Appropriation Committee chair Kimami Ichungwa (Kikuyu) said the country must be alive to the fact that Kenya Revenue Authority (KRA) has never met the revenue target.

“KRA is facing challenges in collecting revenue. According to the Controller of Budgets, Agnes Odhiambo the projections have never met. This also applies to dwindling own source of generation collection for counties in the last three years,” he said.

Mr Ichungwa added: “Revenue generation is the basis of projections of Sh1.877 trillion, yet we have faced huge shortfall in the past.”

Mr Duale and Mr Mohammed urged leaders to be realistic in agitating for more funds to counties.

“The principle of equity must apply when it comes to taxation. The principle of equity must apply when it comes to borrowing. You can’t say give me my share then you leave the element of debt to another arm of government,” argued Duale.

This has seen Dr Kinyua ensure Sh450 billion budgeted for the Big Four Agenda is availed.

In his circular dated July 23, addressed to chairpersons of State Corporation and Chief Executive Officers, he stated that the government is working to align the financial year’s budget to support the Big Four Agenda.

“In furtherance of the same, the Cabinet has directed that all state corporations and Semi-Autonomous Agencies, spend an amount equivalent to the one quarter of last year’s approved recurrent budget.

“A moratorium is hereby issued placing in abeyance all capital expenditures until otherwise directed.”

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President Uhuru KenyattaNational AssemblyDivision of Revenue Bill