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{
    "id": 1089769,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1089769/?format=api",
    "text_counter": 354,
    "type": "speech",
    "speaker_name": "Sen. Farhiya",
    "speaker_title": "",
    "speaker": {
        "id": 13179,
        "legal_name": "Farhiya Ali Haji",
        "slug": "farhiya-ali-haji"
    },
    "content": "A procuring entity shall pay an interest under this Bill for the period beginning on the day after the prescribed payment date and ending on the date on which the payment of the amount due is made. We already said that the prescribed payment date is 90 days after you have all the documentation. After that, the interest starts accruing. Mr. Temporary Speaker, Sir, it is illegal to procure for either goods or services for things that you do not have a budget for. If you have a budget for it, then you must have the finances to pay. The other issue that brings about pending bills is when county governments inflate their local revenue collection. That way, their budget becomes bigger and they under perform in revenue collection. After they under perform on revenue collection, they do not have money to pay suppliers. They probably collected 10 per cent from people, it is time to make payment, and yet there is no money to pay. The Committee on Finance and Budget is planning to cure this through an amendment to the PFM Act by making a clear criterion for estimating revenue. We said that the average of the actual collection of the last three years is the maximum that you can estimate as your local revenue collection. For example, where I worked before, if you failed to stay within your budget, it was a clear disciplinary action that could lead you to lose your job. However, in Government institutions, people do that all the time and nothing happens to them, which is sad. The economy can only grow if money circulates within counties. So, when people supply to either the national Government or county government and they are not paid yet they had borrowed the money, they default on their interest. This becomes a big problem for the economy. The country can only generate revenue if people make profits. The people who are not paid cannot make profit, they only make losses. This is because the interest will over-shoot the profit that they were expecting. Banks will charge interests because they do not exist to do favours but to do business of collecting interest. If the interest continues to accumulate, it eats into the profit and capital base. So, businesses are supposed to make profits which pay the principal borrowed plus interest then have something left for either reinvestment or personal use. The National Treasury does not meet its target, year in, year out because people do not make profit yet the Government is taxing. Government relies on Value Added Tax (VAT) or Pay as you Earn (PAYE) because people must have salaries. If there is no money circulating within the economy, it means jobs are not created. This is because jobs are created by the same people who are not paid. As a country, we cannot develop if the current level of pending bills continues. In my county, right now, pending bills are estimated to be Kshs4 million. Can you imagine a county like Wajir owing that amount of money to its people? Now, populate that to other counties and Government institutions. We are in for a disaster unless we address this issue of prompt payment. That is where this Bill comes in. Mr. Temporary Speaker, Sir, after 90 days, the interest start to accrue until it is paid. Once a person knows that they have submitted everything and finished all the work, three months down the line, they get paid. If they do not, the interest from the bank will be paid by the interest from whatever accrues from the person who has not paid. So, it is a fair process."
}