Governors yesterday rejected a law proposed by the National Treasury that seeks to take away their powers to collect revenue.
The county bosses termed the County Government (Revenue Raising Regulation Process) Bill, 2017, unconstitutional and said its implementation would cripple devolution.
Sources in the Council of Governors (CoG) told The Standard that the county bosses told officials from National Treasury Cabinet Secretary Henry Rotich’s office that they were against the Bill and would not allow it to be enacted.
Addressing the press after the meeting, CoG Chairman Josphat Nanok (Turkana) said they had identified a technical team to work with the National Treasury to come up with policies to assist counties to reach their revenue targets.
“The council has examined the Bill and recommended that the issues raised therein be codified into policy that sets down uniform guidelines to assist counties to reach their revenue collection targets,” said Mr Nanok.
According to the Bill, county governments will have to get approval from Treasury before imposing taxes, levies, and duties within their jurisdictions.
Should it be enacted, the Cabinet secretary for Finance shall establish and constitute an inter-agency transitional committee to review the taxes, charges, and fees envisaged in the Act. The committee shall be composed of the Treasury, the Commission on Revenue Allocation, the Intergovernmental Relations Technical Committee, CoG, and the Kenya Revenue Authority.
The committee shall review the taxes, charges, and fees and make recommendations to the Cabinet secretary for consideration.
Last evening, Nyandarua Governor Francis Kimemia told The Standard that the Bill sought to control how counties generate their revenue and in its current form, it would not help the devolved units to grow.
“We need to expand our revenue base, reach areas that are not currently being taxed,” Kimemia said.
Kimemia explained that increasing the taxable areas would ease the burden on businesses and areas currently being taxed heavily since the burden would now be spread across a wider base.
He added that governors had resolved to automate revenue collection to eliminate leakages.
According to the Controller of Budget’s first quarter report for 2017 to 2018, counties expect to generate Sh55.9 billion from local sources and Sh25.17 billion as cash balance of 2016/17 year.
To finance the 2017/18 approved budgets, counties expect to receive Sh302 billion as equitable share of revenue, Sh23.27 billion as conditional grants from the national government, and Sh16.41 billion conditional grants from development partners.