MPs and Senators Clash Over Division of Revenue Bill
A fresh standoff has come to a head in Parliament after the National Assembly flat out rejected proposals put forward by the Senate to deal with revenue shortfalls under the Division of Revenue Bill.
The dispute has now pushed the two Houses towards mediation and is setting the stage for yet another round of haggling over billions of shillings earmarked for county governments.
Why Parliament Is Forming a Mediation Committee
National Assembly lawmakers voted to set up a Mediation Committee after voting down the Senate-backed proposals that would have required the national government to pick up the tab for any revenue deficits recorded during the financial year.
Under Article 113 of the constitution a mediation committee gets formed whenever the National and Senate can’t agree on a Bill. This committee is usually made up of members from both Houses and is tasked with finding out what the common ground is before anything can proceed.
The disagreement once again highlights the long-running tensions between the two chambers over how the national revenue is split up between the national and county governments.
MPs Warn Proposed Formula Could Hurt Other Budgets
National Assembly Majority Leader Kimani Ichung’wah and Minority Leader Junet Mohamed were both defending the decision by MPs that the Senate’s proposal would put too much strain on the national budget and disrupt all the development projects they currently have going on.
“This is the last budget we’ve got to get anything done with, because the next one we do in March-April 2027 will be kicked into action come July and by then you’ll all be out there campaigning so if you have projects under the national government which you want to complete, this is the budget to get them done,” Ichung’wah said in a pretty blunt warning.
Lawmakers who are on the side of the National Assembly argued that forcing the national government to swallow all revenue shortfalls would inevitably mean cuts in other areas of government spending.
Senate Pushes for Higher County Allocation
The Senate had given the thumbs up to recommendations from its Finance & Budget Committee calling for a framework to allocate Ksh. 454.74bn to county governments as their equitable share of revenue.
The 454.74 Billion is 22.2% of the audited revenues collected during the 2022/23 financial year.
What the Senate originally proposed was:
- County governments get Ksh. 454.74 billion\
- The national government gets to hang on to Ksh. 2.437 trillion\
- The Equalisation Fund gets 10.25 Billion Ksh.
All this is based on a total revenue of Ksh. 2.902 trillion.
What Happens Next
The mediation committee is now going to try and break the deadlock and come up with a version of the Bill that both Houses can live with. If they can manage to come to some sort of agreement then the revised proposal will get sent back to Parliament for approval. But if that fails then the Division of Revenue Bill could be in for even more delays which could have far reaching implications for budget planning at both the national and county levels.
The outcome of the talks is going to get a lot of attention from governors and county leaders who have consistently been pushing for bigger allocations as their operational costs just keep on rising.
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MPs and Senators Clash Over Division of Revenue Bill
