This archive report was first published on 17 September 2019.
President Uhuru Kenyatta has finally signed the Division of Revenue Bill 2019 into law, ending a three-month stalemate between the national and county governments.
However, the Senate has rejected the version of the bill signed into law by the President, accusing him of clawing back democratic gains made since the Constitution was promulgated.
According to the new law, counties will share Sh378.1 billion, with Sh316.5 billion (84%) being the equitable share of revenue raised nationally, and Sh61.6 billion (16%) being conditional allocations to counties.
The signing of the bill now paves the way for the release of funds to the counties, with President Kenyatta urging them to prioritize the settlement of pending bills, which have hurt suppliers and contractors, and ended businesses for others.
By February, counties owed Sh100 billion in pending bills, out of which Sh40.5 billion was found to be eligible for immediate payment.
Acting Treasury CS Ukur Yatani said the extended delay in the approval of the law had adversely affected the implementation of counties' 2019/20 financial year budgets, with consequences on socio-economic activities as well as the delivery of crucial public services countrywide.
“While the vertical division of revenue is by design a political process, there is clearly urgent need for concerted effort by all actors to avert a similar stalemate in the future,” he said.
However, senators warned that the President's action was a threat to devolution, saying it would kill devolution as was the case in 1966.
“The Executive is taking us back to the days of dictatorship,” Narok Senator Ledama ole Kina said.
The bone of contention between the two Houses is the commencement date of the Revenue Act, with the Senate wanting it to be immediately after the presidential assent, and the National Assembly backdating it to July 1.
