RESTORING THE DIVISION OF REVENUE ACT 2017, PROCESS

MEDIA RELEASE FROM CRA CHAIRPERSON

The principle mandate of the Commission on Revenue Allocation under Article 216, is to make recommendations concerning the basis for the equitable sharing of revenue raised by the national government between the national and county governments, six months before commencement of a financial year. This was duly done in September 2016, in line with the revised budget calendar.

On this matter, the Commission wishes to make the following statement:

The Commission recommended Ksh. 323 billion and the National Treasury Ksh.299 billion for counties. However, the National Assembly published the Division of Revenue Bill 2017 allocating county governments an equitable share of Ksh. 291 billion. The Senate rejected the National Assembly Bill and instead published the Bill allocating counties Ksh.314 billion, resulting in an impasse.  The first attempt at mediation collapsed and the bill was defeated.

The National Assembly has since republished the Division of Revenue (No.2) Bill, 2017 with exactly the same provision of Kshs 291 billion. The Senate has once again rejected the Bill.

Since September 2016 when the Commission made its recommendations of Khs 323 billion to county governments, several things have happened with substantive financial implications, notably;

  • The nationally raised revenues have fallen short of target,
  • The country has experienced a severe drought necessitating provisions for relief food,
  • The country has experienced maize shortages calling for food imports and provision of subsidies,
  • There have been negotiated collective bargaining agreements for unionasable staff, and
  • The implementation of the job evaluation by SRC for both levels of government, among others.

In light of the above developments with fiscal implications, the Commission strongly recommends that;

Both houses of parliament reconsider their hard positions and negotiate a mediated allocation to counties that lies between the National Treasury recommendation of Ksh299 billion and the Senate provision of Kshs 314 billion. This will also pave way for the enactment of the County Allocation of Revenue Bill, 2017.

The Commission is concerned that parliament has one day left to conduct business and if the stalemate remains unresolved, the country is staring at a budget crisis. Starting July 2017, both levels of government will be left without budgets which will result in unnecessary disruptions in service delivery.

While the onus of passing the Division of Revenue Bill lies with parliament, the Commission is committed to its mandate of providing objective and impartial recommendations in ensuring that revenues raised nationally are shared equitably between the two levels of government.

Dr. Jane Kiringai

CRA CHAIRPERSON