New law to deny corrupt counties funds mooted : The Standard

Counties that do not account for their own sources of revenue will not receive their share of funds from the National Treasury, according to a proposed law. The bill by nominated Senator Agnes Zani will also see Kenya Revenue Authority (KRA) start collecting taxes jointly with counties if it becomes law in what is aimed at boosting collection and ensuring accountability. The Public Finance Management (Amendment) Bill, 2019 proposes to have a joint revenue collection framework by county governments and the National Treasury together with KRA. It is currently in its first reading in the Senate. Counties that will not have developed and implemented a county revenue collection system or fail to report on the status of their revenue collection and performance will not receive their share of allocation from Treasury.

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"It (the Bill) also provides for stoppage of transfer of a county's equitable share of revenue for failure to operationalise the county revenue collection system or prepare and submit bi-annual statements or an annual report,” said Zani in the Memorandum of objects and reasons. The bi-annual and annual reports shall be submitted by the County Treasury to the Senate, the National Treasury and the Commission on Revenue Allocation. The bill adds impetus to other efforts to have counties boost their own revenue sources. "The principal object of this Bill is to amend the Public Finance Management Act, No 18 of 2012 to establish a collaborative framework for collection of revenues by the county governments and the National Treasury together with the Kenya Revenue Authority. This is intended to boost revenue collection by the county governments and ensure accountability,” said Zani. The 47 county governments have been struggling to raise their own revenue, a situation that has seen them rely mostly on taxes collected by the national government through KRA.

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In the first nine months of the 2018/19 financial year, the counties had collectively raised just slightly over half of their 12-month target of Sh54.2 billion from their own revenue sources, according to a report by the Office of the Controller of Budget. The devolved units own revenues stood at Sh28.9 billion as of March this year.   Currently, the two levels of government are at loggerheads on how they should share equitable revenue, with the National Assembly and the Senate pulling in different directions. In his Budget Speech this year, embattled National Treasury Cabinet Secretary Henry Rotich said they would collaborate with the Council of Governors to implement the National Policy to Support Enhancement of County Governments’ Own-Source Revenue.

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National TreasuryAgnes ZaniKRACorrupt counties