Senate committee rejects counties cash bill again

Business Daily Kenya:  County governments are staring at a cash crisis after the Senate Finance Committee yesterday rejected the Division o...

Business Daily Kenya: 

Payments. Photo/Courtesy

County governments are staring at a cash crisis after the Senate Finance Committee yesterday rejected the Division of Revenue Bill (DoRB) submitted by the National Assembly for approval ahead of the new financial year.

The Bill, which is critical in unlocking funding to the devolved units, provides for equitable division of revenue raised among national and county levels of government as required under Article 218 of the Constitution.

DoRB must be in place before the Appropriation Bill is finalised. Failure by Senate to approve the Bill will affect operations of the 47 devolved units because, unlike the national government, the counties will not be able to prepare and pass their budgets until the DoRB and the County Allocation of Revenue Bill are passed.

The Bill has been dogged by controversy since it was published in March after the two Houses haggled and failed to agree on how much equitable share the counties should be allocated.

The contestation was stoked by the Commission of Revenue Allocation (CRA) which pegged the equitable share at Sh314.7 billion, which the National Treasury reduced to Sh299 billion when it submitted the Bill to the National Assembly for consideration.

In its wisdom, the National Assembly reduced the amount further to Sh291.1 billion hence creating a stalemate. The Bill was then referred to a mediation team comprising members from each House to strike a compromise before it is presented to the President for assent but the team failed to reach a consensus.

While the Senators wanted the amount increased to Sh353 billion from the CRA’s Sh314.7 billion, they grudgingly accepted the National Treasury cap of Sh299.1 billion as a compromise.

Last week, the National Assembly’s Budget and Appropriations Committee sent the Bill to Senate for approval without changes apart from amendments on the conditional allocation from loans and grants.

They also reviewed and increased the roads maintenance levy fund because of additional collection realised after the Finance Bill was revised in July 2016.

“It is very disappointing that the National Assembly went ahead and published the same Bill we rejected even after mediation because of a number of reasons, including the fact it does not meet the threshold set by CRA, which determines the basis for revenue growth,” Senate Finance Committee chair Billow Kerrow said yesterday.

“We cannot approve this Bill without the amendments we proposed earlier nor will we make new amendments. We opt to reject the Bill in its entirety. We will make our report and have it adopted tomorrow by Senate.”

If the Bill fails to be approved by the two Houses before their term ends on August 8, a new Bill will be published by the incoming Parliament and the process starts afresh.

Kerrow said it will now be upon the national government, through the National Treasury to look for other options to keep counties operational until the matter is resolved.

The post Senate committee rejects counties cash bill again appeared first on Mediamax Network Limited.

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