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{
    "id": 1550592,
    "url": "https://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."
}