A committee tasked with unlocking the counties revenue allocation stalemate will on Wednesday sign a mediated version of the Division of Revenue Bill aimed at releasing Sh316.5 billion.
In race against time, the mediated version of the Bill will be forwarded to both Houses for consideration on Thursday to rescue operations in the 47 counties. The counties are already feeling effects of a cash crunch.
“The Bill will then be presented for assent by Friday, September 13, 2019 to unlock the cash crunch in the counties,” National Assembly Speaker Justin Muturi said.
He said this after senators gave in to their standoff with members of National Assembly on revenue allocation to the devolved governments by accepting Sh316.5 billion.
Way forward
The initial bill drafted by the National Treasury did not succeed after the two Houses failed to agree on the amount to be allocated to the counties.
The National Treasury had allocated Sh310 billion, down from Sh314 billion that counties received in the previous financial year 2018/19. This decision turned the two Houses against each other.
The National Assembly supported reduction of the revenue to counties but the Senate rejected the figure on the grounds that it was contrary to the Commission of Revenue Allocation (CRA) recommendation of Sh335 billion.
The CRA is said to have arrived at Sh335 billion using the Sh314 billion, which is in the Division of Revenue Allocation Act 2018 and Commission of Revenue Allocation Act 2018 as the base and then factoring in a three-year inflation rate at 6.9 per cent.
This led to sittings by a joint team to mediate over the matter, which turned into a circus as both sides shouted at each other in chaotic sittings that collapsed twice.
“This has been a difficult decision for the Senate, but the Senate has been faced with a situation where it has to rise to its calling and put the overall national interest above short-term partisan considerations,” said Senate Majority Leader Kipchumba Murkomen. And in a bid to end the revenue allocation hitches experienced by the counties at the beginning of every financial year, Muturi said the Public Finance Management (Amendment) Bill 2019 is to be prioritised for debate at the second reading.
The Bill is to put in place temporary measures that will allow the 47 counties to automatically access their minimum share of revenue as Parliament debates the annual Division of Revenue Bill.
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