This archive report was first published on 13 May 2020.
On May 13, 2020, the Senate threatened to cut counties' equitable share of revenues to pay off debts owed to pension schemes, aiming to unlock retirement benefits for workers who served in the defunct local governments.
Nairobi Senator Johnstone Sakaja, who chairs the Labour Committee, stated that the counties are holding nearly Sh30 billion owed to the Local Authorities Pensions Trust (Laptrust) and the Local Authority Provident Fund (Lapfund).
Additionally, the counties are holding nearly Sh13 billion in pay-as-you-earn tax contributed by current workers in the 2017/18 financial year.
Senators proposed to deduct the money from the counties' share of revenue to pay off the debts, which would result in a reduction of the counties' equitable share of revenue.
Counties will receive Sh316.5 billion as equitable share in the year starting July, but the amount per county will be slashed if the proposal is implemented.
The devolved units have over the years failed to clear the debts, with some turning to selling property to the pensions schemes to clear the debts.
Nairobi, Nakuru, and Kisumu have donated several residential estates to Laptrust to enable it recover the unremitted dues.
