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{
"id": 1565472,
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"content": "THE DIVISION OF REVENUE BILL (NATIONAL ASSEMBLY BILLS NO.10 OF 2025)"
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{
"id": 1565473,
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"type": "speech",
"speaker_name": "Sen. Kathuri",
"speaker_title": "The Deputy Speaker",
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"id": 13590,
"legal_name": "Murungi Kathuri",
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"content": " Senate Majority Leader, proceed. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
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{
"id": 1565474,
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"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
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"id": 13165,
"legal_name": "Aaron Kipkirui Cheruiyot",
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"content": " Thank you, Mr. Deputy Speaker, Sir. I beg to move that the Division of Revenue Bill (National Assembly Bills No.10 of 2025) be now read a Second Time. For all intents and purposes, and with full realization of my duties as the Leader of the Majority in the House, this is the proudest moment for every Senator. It is at this point that we fulfill our constitutional mandate in its prime. This is ensuring that sufficient resources are devolved to county governments. The Division of Revenue Bill is a constitutional function granted to the Senate, requiring careful reflection and deeper consideration whenever such a Bill arises. In the constitutional architecture, the understanding has been that this Bill originates in the National Assembly. However, if it were up to me, I would prefer that we, as the Senate, provide our considered view before it is incorporated into the budget. This process has become lost and convoluted in numerous opinions and counter- opinions, not only within this House, but from all corners of the country. This includes the Apex Court of the Land, which in 2013 offered one interpretation that we accepted and operated under for the past 11 years. However, last month, the same court issued a ruling that we are still struggling to understand. While this is not the primary context of my remarks today, I felt it would be impossible to proceed without first reflecting on and considering the views of fellow senators regarding the annual Division of Revenue Bill. This is perhaps the most significant legislative duty that any Senator undertakes once elected to serve in this House. The Division of Revenue Bill (National Assembly Bills No.10 of 2025) is prepared in accordance with Article 202(1) of our Constitution. It provides the allocation of nationally raised revenue between the two levels of government, the national Government and county governments, for the financial year 2025/2026. This Bill provides that the revenue is appropriately divided between the national and county governments, ensuring that each level has the necessary resources for the effective implementation of county functions. If there is a fight the Senate must always undertake, and a process we must consistently defend, is the exercise of dividing revenue between the two levels of government. In fact, I have observed speculation in the media regarding the Senate’s position on the Constitutional Amendment Bill currently before the National Assembly as well as our stance on the Senate Oversight Fund. To clarify, we hold no strong attachment to the Senate Oversight Fund. If there is one issue that we must ensure is firmly entrenched in our Constitution, is clarity on the division of revenue. This is essential in affirming the Senate’s position on the allocation of funds to our county governments. The challenges faced by county governments notwithstanding, if there has been any significant constitutional innovation that has contributed to a more stable country compared to previous election cycles, is the assurance that, while resources at the national level remain a matter of contention, at least 15 per cent of that revenue is allocated to county governments. That is something the Senate takes great pride in. I have seen that our colleagues in the National Assembly have provided clarity. They have stated their intention to set the National Government Constituency The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1565475,
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"text_counter": 160,
"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
"speaker": {
"id": 13165,
"legal_name": "Aaron Kipkirui Cheruiyot",
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"content": "Development Fund (NG-CDF) at 2.5 per cent. If this House is to concur, then it must also affirm the exact percentage that should go to the counties for each financial year. The reliance on the last audited financial accounts has left counties struggling under deep debt and operating with insufficient resources. If our colleagues believe that 2.5 per cent of the national budget is sufficient for NG-CDF, let us ensure that 15 or even 20 per cent is set as the minimum allocation for county governments. That way, when the budget is laid in the National Assembly, there is certainty that a dedicated portion of revenue will reach our counties. That would be a fair trade-off; 2.5 per cent for NG-CDF, 20 per cent for devolution. That is an important conversation to have. I know there are arguments about revenue performance and its impact on budget allocations. What about NG-CDF? Why is there an effort to entrench it at a fixed percentage while county allocations remain uncertain? Let us reflect on the budgets passed over the last few years. We have Kshs3.4 trillion and Kshs3.6 trillion, yet only about Kshs300 to 400 billion has gone to county governments in recent years. That is approximately 13 to 14 per cent or barely 15 per cent of the national budget is allocated to counties. It is imperative that we set a clear threshold and reach an agreement, keeping in mind the challenges within our county governments. However, the first and foremost conversation must be about devolving resources. We will address the issues of mismanagement and corruption among governors later. We must first ensure that counties receive the necessary funds. After all, the retention of resources at the national level is not due to the absence of corruption. Corruption exists everywhere. The Ethics and Anti-Corruption Commission (EACC) must fulfill its mandate. On that note, as we deliberate on this matter, I noticed headlines in The Daily"
},
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"id": 1565476,
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"speaker": null,
"content": "Nation"
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{
"id": 1565477,
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"text_counter": 162,
"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
"speaker": {
"id": 13165,
"legal_name": "Aaron Kipkirui Cheruiyot",
"slug": "aaron-cheruiyot"
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"content": "and The Standard newspapers suggesting that there is a political 'fight back' from the President against his critics. Perhaps, the editors of Daily Nation and The Standard newspapers should provide a list of the citizens who, in their view, are above the law. That if you become the President critic, you can do anything with no recourse in laws. The reality is that a criminal is a criminal. If anyone is found to have violated the law, it should not matter which side of the political divide they support. I had assumed that this principle was fundamental, a basic tenet of democracy. However, the trivialization of our politics, perpetuated by some of our newspapers, particularly TheStandard newspaper and, more recently, Daily Nation, continues to hold this country back. We must rise above petty politics. If a governor has been found to have misappropriated county resources and the oversight institutions, the EACC and the Director of Public Prosecution (DPP), are satisfied with the evidence, then constitutional processes must commence. This should be done without political interference, whether in support or opposition. This is not the first time that a governor is under trial. How many governors have been arrested since 2013? There should be no special exemptions for governors simply because they are critics of the Government. What kind of reasoning is this that is being promoted by our leading newspapers? The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1565478,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1565478/?format=api",
"text_counter": 163,
"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
"speaker": {
"id": 13165,
"legal_name": "Aaron Kipkirui Cheruiyot",
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"content": "Anyway, returning to the discussion on Division of Revenue Bill (National Assembly Bills No.10 of 2025), Clause 4 stipulates that revenue raised nationally for the financial year 2025/2026 shall be shared equitably between the national and county governments, in accordance with the Schedule of the Bill. Clause 5(1) provides that if the actual revenue raised nationally falls short of the expected revenue set out in Schedule, the shortfall shall be borne by the national Government. If you listened to me earlier, I had proposed only 15 or 20 per cent. Subsequently, if you have a significant shortfall because in the first instant you had taken 80 per cent of the national budget and left it at the national Government, then they shall bear the responsibility. I must appreciate that that has always been the case, save for unique moments when we have had challenges, like last year when we had the failure to assent the Finance Bill, there was a significant drop in nationally expected revenue by close to Kshs400 billion. Therefore, we had to review downwards what we had actually proposed in DORA. If you recall, late last year towards November, we had to do a new set of Division of Revenue Bill. I cannot get the exact figures. I think the Members of the Budget and Finance Committee will recall that we had to do that. Clause 5(2) of the Bill provides that, “if the actual revenue raised nationally exceeds the projected revenue set out in the Schedule, the excess revenue shall accrue to the national government and may be used to reduce borrowing or pay debts.” This has never happened and it will be Christmas or Ramadan, whichever way you may, want to put it, if it happens. What would happen if this were to ever happen, that we raise more than the projected revenue? The excess revenue shall accrue to the national Government and may be used to reduce borrowing or pay debts. It is just a balance, that if there was to be a shortfall, you bear the burden. However, if we were to happen that you get a windfall and raise excess revenue beyond what we had projected, then that becomes something for the National Treasury to manage our budget books better. This has never happened in all those years and I do not see it happening. I will be looking with more detail to see what the fiscal deficit will be. Since that is the indicator of what will be the eventual budget that will be projected before we eventually agree on this issue of division of revenue. I want our colleagues in the National Assembly to hear me loud and clear. If the fiscal deficit is above 4.5 per cent, then we have no reason not to send upwards of Kshs420 billion to Kshs430 billion to the counties. I will be speaking to that later, when eventually they lay their report on the Floor of the House next week. I cannot speak for now because I do not know eventually what they will agree on. Accordingly, we will be waiting for the report of the Committee on Finance and Budget of the National Assembly. My point and my argument, which I shall be pushing on the Floor of this House as somebody who follows, understands and knows our budget-making process keenly, knows what ought to be the balance between what is shared nationally and at the county The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
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"id": 1565479,
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"text_counter": 164,
"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
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"legal_name": "Aaron Kipkirui Cheruiyot",
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"content": "government. My argument is that at a 4.5 per cent fiscal deficit, then Kshs430billion is possible. Mr. Deputy Speaker, Sir, should it be reduced downwards, then we can have a conversation about the figures that I hear being mentioned by our colleagues in the National Assembly because it means there is limited fiscal space. We cannot have a situation where we are allowing the National Treasury to borrow colossal amounts of money while sending to counties very few resources. Mr. Deputy Speaker, Sir, you will recall and I wish Sen. M. Kajwang, the Chair of the County Public Accounts Committee (CPAC) was here with us. That due to the court's ruling, we met here towards the end of the session. We received the audit reports of many of our counties and passed them in one afternoon. We raised comments and said, we shall find mechanisms through ways and means of addressing that particular challenge. You will recall that we, as a Senate, raised a concern that if all the 47 county governments were business entities, we would be concerned that most or all of them are not growing. The rule of life is that if you are not growing, then you are actually dying. It only depends on the speed at which you are dying. It could be a quick one or a slow one. What are the indicators of growth? We said that many of our counties are not raising significant amounts of funds in own source revenue. I think it was about 34 out of 47 counties that are doing more than 50 per cent of their shareable revenue to pay recurrent expenditure. Actually less than 10 out of 47 counties, spend more than 25 per cent of their shareable revenue on actual development, which is the statutory edict as per the Fourth Schedule of the PFM Act and Regulation, 25. Besides, that is a conversation which I have kept on challenging my colleagues who serve in the Committee on Budget and Finance. I know the Vice-Chair is in the House, though she is not listening to what I am saying. I hope that one day they will lead this House into a proper conversation about what needs to happen. This is something that should be of concern to any Senator. It makes no sense, colleagues, to fight for Kshs400 or Kshs450 billion while 90 per cent of that fund ends up being misappropriated. Why should we fight to send Kshs450 billion, for example, to the counties, if more than 50 per cent goes to pay 300,000 or 400,000 citizens, to the exclusion of the millions of others? If you go to Meru County although I do not know what the population of Meru is, for example. However, simple mathematics, I want to believe maybe upwards of one and a half or nearly two million, because Meru is a fairly large county, let us give it 1.6 million. If out of your shareable revenue of upwards of Kshs10 billion, your governor ends up spending more than 50 per cent of it to pay employees who are barely 4,000 or 5,000 in that particular county, what are you telling the rest of the1.55 million citizens that do not work in the counties? I have been pushing that as a House, we must have this conversation. You know, it is simple and populist to say I have employed so-and-so. Nowadays, governors have found a new way of explaining. They hide behind very popular employment initiatives. I have picked young people and I have to employ them as revenue officers so that we get more revenue or I have picked nurses or this or the other. While it may sound logical, The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
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"id": 1565480,
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"type": "speech",
"speaker_name": "Sen. Cheruiyot",
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"content": "commerce has no feeling. It has sense only. You either do the right thing or you fail. It does not matter the intention or how emotional you are about it. If at the end of the day you are not managing your resources prudently as a county government, the results will show very quickly. I want to request our colleagues to reflect deeply on this particular matter as we think about division of revenue and the things that we need to do. The final part of this is that, the Sixth Schedule allocates a total of Kshs2.835 trillion as follows – national Government remains with Kshs2.4 trillion, Equalisation fund gets Kshs10 billion and Kshs405 billion to county governments. I know the Committee on Finance and Budget has thought through this process. They have proposed an even higher figure. As the Vice-Chair comes to second, I am sure she will speak to the House and tell us what is her proposal before we eventually agree with them or see what to do. Mr. Deputy Speaker, Sir, knowing that this is something that many colleagues want to comment on and share their thoughts, particularly on all these issues that continue to face our county governments, it would be unfair for me not to yield the floor so that colleagues can speak to this particular Bill. I am guided by the report that was tabled by the Committee on Finance and Budget, which I want to believe by now, has been shared with us in the official channels of the House. Mr. Deputey Speaker, Sir, with those many remarks, I beg to move and request Sen. Tabitha Mutinda, who is the Vice-Chairperson of the Committee on Finance and Budget of the Senate, to second and take us home with regards to the 2025 Division of Revenue Bill. I thank you."
},
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"type": "speech",
"speaker_name": "Sen. Kathuri",
"speaker_title": "The Deputy Speaker",
"speaker": {
"id": 13590,
"legal_name": "Murungi Kathuri",
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"content": " The Vice-Chair of Budget and Finance, Sen. Tabitha Mutinda."
}
]
}