Wambora urges Senate to consider climate action while negotiating county budgets » Capital News

WOTE, Kenya, Nov 24 – The Council of Governors (CoG) has challenged the Senate to consider the financing of locally-led climate action while negotiation county allocations.

While making opening remarks at the 7th Devolution Conference in Makueni, a 3-day which will seek the adoption of locally-led climate action intervention, CoG Chairperson Governor Martin Wambora (Embu) said availability of adequate budgets in counties was key to facilitating climate action at the sub-national level.

“The Senate needs to consider climate change when it is negotiating for the counties’ share of revenue. County governments should also become innovative in tackling the effects of climate change,” he said.

Wambora said county governments are committed to the climate action agenda and had over the years demonstrated that they are “indispensable and dependable players”.

The CoG Chairperson noted that devolved units had been compelled to mainstream climate action in their respective County Integrated Development Plans as a result of adverse effects on food systems, water, urban, infrastructure and health.

Further, he noted that five counties — Kitui, Makueni, Garissa, Isiolo and Wajir — had operationalized County Climate Change Funds with allocations ranging between 1 to 3 per cent to finance efforts aimed at reducing climate change-related risks and promote adaptation.

Wambosa cautioned that the gains risked being reversed if adequate funding is not availed to counties.

Counties have over the years decried inadequate allocations sparking protracted disputes over Equitable Share allocations.

Under the 2022/23 financial year, county governments are set to received Sh370 billion after the Commission on Revenue Allocation recommended retention of funding availed to devolved units in the 2020/21 budgets, a proposal adopted by the Intergovernmental Budget and Economic Council (IBEC).

The Sh370 billion was allocated after a long-drawn standoff which culminated in the review of an initially recommended allocation of Sh316 billion.

The 2020/21 allocation entailed an equitable share component of Sh316.5 billion and Sh13.7 billion in conditional grants.

Reacting to the proposed retention of county allocations at Sh370 billion, the governors’ council dismissed reasons for the non-increment cited by the CRA which included slow revenue growth, constrained fiscal framework, need to contain the public wage bill and the need to finance and provide security for the August 9, 2022 General Election.

CoG contended that CRA’s proposal does not reflect and is not commensurate to the growth in revenue.

The Council reiterated its demand for an allocation not falling short of 35 per cent of revenues collected by the national government.

The organ representing 47 county governments justified its demand saying more resources were needed in counties to reinvigorate the economy and jumpstart the much-needed recovery from the meltdown occasioned by the coronavirus pandemic.

The governor’s council further argued that the allocation should correspond with the increase in revenue, with projections estimating revenue for the 2022/23 financial year at Sh2.2 trillion up from the Sh1.8 trillion projected in 2021/22.

A quarterly reported released by the Kenya Revenue Authority (KRA) on October 4 indicated the tax agency had surpassed its Sh461.7 billion target for the July-September quarter by Sh15 billion.

“The performance reflects a sustained revenue growth in the first three months of the year, with a performance rate of 103.2 per cent and growth of 30 per cent,” the agency reported.

KRA exceeded its July target with a surplus of Sh311 million having realized Sh152.9 billion at the start of the financial year.

The agency’s projections for the second half of the financial year are however under threat following multiple attempts to review taxes downwards in a bid to cushion an overburdened taxpayer.

In September for instance, the High Court invalidated a provision of the Income Tax Act requiring the payment of minimum tax at the rate of 1 per cent of gross turnover which came into effect on January 1.

The provision, seen as a plan by government to narrow a fiscal deficit estimated at about 7.5 per cent of the Gross Domestic Product, made it mandatory for payment of tax even when a business makes loses, sparking condemnation from owners of small and medium enterprises.

Justice George Odunga said Section 12D introduced by the Finance Act through the Tax Laws (Amendment) (No. 2) Act, 2020 “violates Article 201(b) (i) of the Constitution and as such null and void.”

The National Assembly is also considering halving tax rates on petroleum products amid a sustained outcry over the rising cost of fuel.

Taxes earmarked for review include a 16 per cent VAT charge on LPG which has been linked to an aggressive increase in the price of cooking gas.

The 8 per cent VAT charge on petrol, diesel, kerosene could also be reduced to 4 per cent if the House adopts a report by the departmental committee on finance.