Friday, October 11, 2024 — A crucial meeting of the Budget and Appropriations Committee, chaired by Hon. Ndindi Nyoro (Kiharu), convened today at Parliament Buildings to consider Senate amendments to the Division of Revenue (Amendment) Bill, 2024. The bill, a significant legislative step, aims to adjust the revenue-sharing framework between the National and County governments following a substantial shortfall in projected revenue for the 2024/25 fiscal year.
The amendment is a response to the unexpected failure to pass the Finance Bill, 2024, resulting in a Ksh 346 billion revenue deficit. The proposed solution redistributes the burden between the two levels of government, with the National Government absorbing Ksh 325.88 billion of the shortfall, while Ksh 20.12 billion is to be deducted from the County Equitable Share.
The revised allocations suggest a notable reduction in funding: the National Government’s share is proposed to drop from Ksh 2.540 trillion to Ksh 2.214 trillion. Similarly, County Governments’ allocation will be scaled down from Ksh 400.117 billion to Ksh 380 billion. Despite this reduction, the equitable share for counties still meets constitutional requirements, standing at 24.2% of the last audited revenues, above the 15% minimum stipulated by Article 203(2) of the Constitution.
Hon. Nyoro highlighted the significance of aligning the bill with the recently passed Supplementary Estimates I, which factored in the Equalization Fund. “Whatever we discuss today must consider our current fiscal status, given that Supplementary I is already law,” said Nyoro, emphasizing the fiscal realities at play.
The committee also addressed concerns over how Senate amendments to the Division of Revenue Bill could affect the forthcoming Supplementary II Estimates. The committee faces two paths forward: either to pass the bill with the Senate’s amendments or reject them, triggering a mediation process under Article 113 of the Constitution.
The committee is expected to table its final report on the bill in the National Assembly next Tuesday, which could shape the fiscal landscape for the year ahead.
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