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{
"id": 1550592,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550592/?format=api",
"text_counter": 523,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": "ordinary revenue. This means that we have room to bring on board more people into our tax bracket. The tax bracket today is majorly financed by people in the formal sector. We have professionals in the informal sector who do not pay taxes. We also have medium-sized enterprises that have not been brought into the tax bracket. We also have commercial farmers in Agriculture. The agricultural sector does not contribute resources that we need to contribute through taxation. These areas are the low-hanging fruits that this House must tap into so that we meet our revenue deficits. This year, we are projecting to pay about Ksh1.2 trillion in interest on our fiscal debt. This has not just come from the blue. It is a consequence of deliberate borrowing from the year 2014 up to the year 2023. In 2014, our debt repayment was only Ksh170 billion when President Uhuru Kenyatta took over the presidency. When President Uhuru Kenyatta left Office, the debt repayment on interest was at Ksh840 billion. This is a substantial growth. It is the reason, to date, we are paying Ksh1.2 trillion. The misnomer in this borrowing spree is that investments in development expenditure have not grown over the same period. Development expenditure has remained stagnant at Ksh500 billion while interest repayment on fiscal debt has gone up to Ksh840 billion. I have deduced something. Either the borrowing was not used appropriately to fund development, or that money got lost somewhere. We must be brave and admit that we have mismanaged our fiscal space in the last 10 years. That is why today, we have to fund interest payments to the tune of Ksh1.2 trillion. I am giving this background as I try to build a case for the county revenue sharing that we are going to present to the House. The Budget and Appropriations Committee has proposed an equitable share to counties of Ksh405.1 billion. This amount is based on a predictable base and is grounded in projected revenue figures and considerations of national debt obligations. When we did public participation as we were processing this Bill, we met many stakeholders. One of the stakeholders we met was the Commission of Revenue Allocation. We also met the Council of Governors and the Institute of Certified Public Accountants of Kenya (ICPAK). All these institutions disagreed with us on our proposed allocation to counties. For example, the Commission of Revenue Allocation proposed that we allocate about Ksh417 billion to counties as county share of revenue. At the same time, the Council of Governors asked us to give them Ksh536 billion as county share of revenue. The Budget and Appropriation Committee was of the view that the appropriate amount to allocate to counties, based on the stress that we have from the fiscal deficits faced, is Ksh405 billion, as I said. One of the things that we need to know is that in the last two financial years, at the end of each financial year, we closed with deficits due to counties. When we started the new financial year afterwards, that was the first redemption that had to happen. In the last financial year, we closed it with about Ksh30 billion that was owed to counties. Again, that shows that we are having a challenge in raising the revenue that we give counties. We must also know that the law is very clear in case of revenue shortages. That shortage is borne by the national Government and not the county governments. Therefore, we must be very sure that our economy can raise whatever amount that we propose to give to counties. Lastly, if you read Article 203 of the Constitution, it explains the process of how the Ksh405 billion is arrived at. First, it is a percentage of the audited and approved revenues. As of now, we are dealing with approved revenues for the 2020/2021 Financial Year. As a House, we need to process the auditing and approval as fast as possible. We are in the 2024/2025 Financial Year, but the approved revenues are still lagging. That is a concern. I urge the Committee in charge of auditing and approval to fast-track their engagements with the various Government agencies to quicken this process. Let me also speak about the Equalisation Fund, as it is also one of the items in this Bill. We have allocated 0.5 per cent of approved and audited and approved revenues, which is The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1550593,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550593/?format=api",
"text_counter": 524,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": "Ksh7.6 billion. This Fund lags in the disbursement of arrears currently amounting to Ksh46 billion. The Fund has a lifespan, and I am not sure we will be able to disburse the huge arrears in the next five years. I would propose that the House consider amending the law to extend the lifespan of the Fund."
},
{
"id": 1550594,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550594/?format=api",
"text_counter": 525,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": "The other issue with the Fund is that projects being funded do not have the impact intended in the Constitution. We have challenged CRA to come up with a formula to identify strategic areas and projects to be funded so that this Fund has an impact."
},
{
"id": 1550595,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550595/?format=api",
"text_counter": 526,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": "As I conclude my submission, Budget and Appropriations Committee members have assured me they will work with this House as a team. We ask the House to give us support so that we can meet your expectations as per the law."
},
{
"id": 1550596,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550596/?format=api",
"text_counter": 527,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": "I beg to move and call upon Hon. (Dr) Pukose, the Vice-Chairman of the Budget and Appropriations Committee to second."
},
{
"id": 1550597,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550597/?format=api",
"text_counter": 528,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": " Thank you, Hon. Temporary Speaker. I stand to second the Division of Revenue Bill (National Assembly Bill No. 4 of 2025) for the Second Reading. I thank the Chairperson for ably explaining the economics behind the Bill. The Committee looked at the Bill and listened to stakeholders, including CRA, CoG, ICPAK and others. Article 203 of the Constitution provides that a minimum of 15 per cent of the Budget should be allocated to county governments. The Ksh405.1 billion allocated amounts to 25.7 per cent of the last audited accounts for the 2020/2021 Financial Year. We are still using the same audited accounts, which is three years back. This calls for this House, particularly the Public Accounts Committee, to move with speed and make sure that we are up to date with audited and approved accounts. This amount might look small, but we should consider that KRA has not been able to meet the projected revenue figures. The national Government’s budget is often affected badly, and we have to pass a supplementary budget to rationalise expenditures. We think Ksh405.1 billion is a reasonable and achievable share for county governments."
},
{
"id": 1550598,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550598/?format=api",
"text_counter": 529,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": "Another issue with the Equalisation Fund is about what it achieves on the ground. The Constitution intended the Fund to benefit areas left behind following the implementation of Sessional Paper No.10 of 1965. These areas are mainly in arid and semi-arid regions. However, when you look at the formula, you will find that certain areas are being allocated very little money, such that one has a project worth Ksh1 million or Ksh2 million. What can we achieve with such a small amount of money? That is why we are calling for a review of the formula to ensure it benefits those areas. When you look at the areas where the money was initially released in the arid and semi-arid regions, you will not find any tangible project achieved with that money. We have spent a lot of time arguing about whether the Fund should be implemented by the counties or at the constituency level. We have even ended up in Court to resolve this matter. However, the Constitution clearly states that the national Government should implement those projects through its other agencies. The governors referred to Article 204(2) of the Constitution, which states that the national Government may utilise county governments and other agencies. Therefore, the word \"may\" should not be the basis for taking other institutions to Court regarding the implementation of the Equalisation Fund. We need to allow the Equalisation Fund to achieve its main objective as envisioned in the Constitution of Kenya, 2010, to improve areas that have been neglected in terms of education, health, electricity, and water so that they can be in tandem with the rest of the country. We also urge the county governments to look at their own-source revenue. Currently, many county governments cannot meet their revenue targets because of pilferages, losses, or theft. Either they have not automated their systems, or they are not diligent in terms of own- source revenue collection. Counties like Homa Bay have digitised their systems, and their revenue collection has risen. That is the county the Temporary Speaker comes from. Therefore, The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1550599,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550599/?format=api",
"text_counter": 530,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": "these are counties that we can call out as having done very well. Why are other counties not digitising their systems to enhance revenue collection? If they enhance their revenue collection, they will be able to meet their budget targets. One of the biggest challenges today is the issue of pending bills. Many county governments have pending bills amounting to as much as Ksh179 billion. These are owed to Kenyan businesspeople who have taken bank loans and invested in doing business within their counties. When will they be paid? Some of those pending bills date back to the tenure of former governors who have since left office. New governors who come in do not want to honour the pending bills left by their predecessors, leaving Kenyans to continue suffering. That brings us to an issue this House should look at: how we can assist the counties through the Office of the Controller of Budget to ensure that all pending bills are sorted out. We have pending bills clogging the activities of institutions. For example, county governments have even refused to pay the Kenya Medical Supplies Authority (KEMSA) and owe KEMSA between six and nine months. They have refused to pay them. They decide to go to other chemists or other suppliers to get their supplies. As a House, we should look for solutions that can mitigate such issues so that before we release money to the counties, we have the Controller of the Budget ensuring that pending bills are sorted out. We have even had cases where you have counties informing the Controller of Budget that they have pending bill \"A\" or \"B\", but at the end of the day, instead of paying \"A\" and \"B\", he goes to pay pending bill \"C\" and \"D\". Hence, the person the Control of Budget had been requested to pay pending Bill of \"A\" and \"B\", is left to wait. I think that is very wrong. The Controller of Budget has no mechanism to enforce this. This being a budget-making House, as a Committee, we will come up with recommendations that the House can adopt and see the action that can be taken to penalise a county that requests for payment of a pending bill for “A” and “B” and decides to pay “C” and “D”. Hon. Temporary Speaker, with those few remarks, I want to second. Thank you."
},
{
"id": 1550600,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550600/?format=api",
"text_counter": 531,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "(Question proposed)"
},
{
"id": 1550601,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1550601/?format=api",
"text_counter": 532,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": {
"id": 1565,
"legal_name": "George Peter Opondo Kaluma",
"slug": "george-peter-opondo-kaluma"
},
"content": " Hon. Owen Baya."
}
]
}