An impasse is looming in Parliament after the Senate overturned the Sh380 billion proposed shareable revenue to the 47 counties approved by the National Assembly.
This after senators unanimously endorsed the amendment by the Senate Finance and Budget Committee, sticking their guns that they will take nothing less than the Sh400.1billion earlier approved in the Division of Revenue Act (DoRA), 2024.
Members of the bicameral House are therefore set for a major clash over the shareable revenue to counties, as the matter now heads for mediation as both sides take hardline positions, rekindling the sibling rivalry in turf wars.
On Thursday, 29 senators collectively passed the Division of Revenue (Amendment)Bill (National Assembly Bill) 2024 amendments blocking the proposed slash of Sh10 billion to county governments after the collapse of the Finance Bill, 2024.
Majority Leader Aaron Cheruiyot gave notice of the Finance and Budget committee’s chairperson’s intention to move amendments to the Bill at the Committee Stage.
Chair Senator Ali Roba (Mandera) argued that the National Assembly approvals sought to review the shareable revenue schedule in the projected shortfall to be borne by both levels of government.
“In the previous DoRA, there was the projection of shortfall, which necessitated amendment proportionately, which is not tenable,” said Mr Roba.
He went on, “The schedule is presented, covers reduction on shareable revenue, it proposes shareable revenue reduced from Sh3.9 trillion, to 2.6 trillion and proposes further that the National government gets Sh2.23 trillion, maintaining Sh400.16 billion for counties as past in previous DoRA.”
The committee noted that the total shareable revenue is 2.6 trillion and based on the percent of audited and approved revenue of Sh1.57 trillion for the financial year 2020/21.
National government is to get Sh2.2 trillion, while Sh8 billion for Equalisation Fund, of which 0.5 per centum is Sh7.8 billion and arrears Sh147 million.
The counties’ equitable share is Sh400.1 billion, translating to 25.48 percent of the 2020/21 financial year.
Temporary Speaker Wakili Sigei (Bomet) led the House in the consideration for approval, therefore, with amendments at the third reading.
Senator Cheruiyot reported on the division, informing the Deputy Speaker Kathuri Murungi that the House had agreed with the committee report and Nairobi Senator Edwin Sifuna seconded it.
Senators united in rallying for more funds to counties, stressing their role as provided for in Article 96 of the Constitution to protect counties’ and their interests.
Senate Majority Whip Boni Khalwale said senators should not agree to even remove one shilling from the revenue that the House passed.
“That the Sh400.16 billion in its entirety should go to our counties. I know counties are faced with serious problems of pending bills. The pressure is too much on Kakamega and Nairobi City County,” argued Senator Khalwale.
Nominated Senator Tabitha Mutinda, the vice-Chairperson of the Committee, said they have unanimously agreed to reject the amendments.
“I recall in the beginning of this 13th Senate, there was much forth and back in the arguments of the Division of Revenue,” she stated, adding that the discussion is unanimous to retain the equitable share to the counties at Sh400.1 billion also backed by the CoG.
Senator Mutinda regretted to note that the figures have been reducing from the financial year 2014/2015.
“They started with about 21.7 percent, which is about 22 percent rounding off. In the financial year 2023/2024, the percentage was about 16.8 percent,” she faulted.
Senator Sifuna also concurred, taking issue with Section 2 of the Bill, which has since be amended which talked of amending the DORA, so that they can have what the Bill strangely calls, equitable sharing of the shortfall in revenue.
“In my reading of Article 202 of the Constitution, the only thing that is subject to equitable sharing is the national revenue that has been raised. There is no mention anywhere in the Constitution of sharing of shortfalls,” faulted the Nairobi Senator.
He argued that the reading and understanding of the Constitution is that there is an annual division and allocation of revenue Bill.
“If you look at the Constitution's provisions, it only speaks about an annual Division of Revenue Bill. That means, every 12 months, Parliament is only allowed one Division of Revenue Bill,” he argued
“Curiously, this Bill proposes to amend Section 5 of the Bill that we passed here earlier this year, requiring that the shortfall be borne by both the national and county governments,” he censured.
“Since the advent of devolution, this fourth Senate has breached that target. We all took pride in the fact that we were the first Senators to be able to push the envelope of devolution beyond Sh400 billion.”
Tana River Senator Danston Mungatana also rejected and declined to accept the proposal to reduce the funds to counties.
“The constitution talks to two levels pf government. It is very wrong that the national government continues to be financially sound and counties are starved of funds,” he said.
Vihiga senator Godfrey Osotsi warned that trying to reduce the shareable revenue is an issue that should not be taken lightly.
“We made a decision through the committee to give our counties Sh415 billion. When we passed the Division of Revenue Act and it was taken to the National Assembly, we were ready to go through mediation process,” said Senator Osotsi.
He stressed that they cannot again go below the Sh400 billion and concurred with Senator Sifuna argument that the Act is passed once annually.
Nyeri senator Wahome Wamatinga said the Senate has the responsibility and obligation to the voters to ensure they not only protect devolution, but also promote it.
CS Mbadi maintains the national government could only afford Sh380 billion as opposed to the Sh400 billion counties have asked for.
Governors have differed demanding nothing less than Sh400 billion more so with the rollout of Social Health Insurance Fund (SHIF).
