The National Assembly has begun the process of addressing the anticipated financial deficit resulting from the rejection of the Finance Bill 2024.
The House had last week approved a memorandum sent by President William Ruto calling for the deletion of all the clauses of the Finance Bill 2024, effectively rejecting the Bill whose aim was to raise additional funds for the government.
And in a new communication, National Assembly Speaker Moses Wetangâula outlined what he said is a comprehensive plan to address the anticipated fiscal shortfall arising from the rejection of the Bill.
In a communication to the House, Wetangâula highlighted the need to amend the Division of Revenue Act, 2024, to reflect the revised revenue projections and ensure equitable distribution of funds between the national and county governments.
Members of the House acknowledged that the President assented to the Division of Revenue Act, 2024 on June 10, 2024.
In particular, the Division of Revenue Act provides that the total shareable revenue is Sh2.9 trillion, out of which Sh2.5 trillion was allocated to the national government and Sh400 billion was allocated to county governments.
âThe amounts in the Division of Revenue Act, 2024 may only be realized if the projected revenues are collected by the national government. Any shortfall in the projected revenue collection has a significant bearing on the shares apportioned between the two levels of government,â said Wetang’ula.
To ensure that the national government does not default on its obligations, the Division of Revenue Act, 2024, will be amended to reflect the revenue that the national government is capable of transferring to the counties given the current reality.
âThe Chairperson of the Budget and Appropriations Committee, Ndindi Nyoro is expected to introduce a Bill to effect necessary amendments to the Division of Revenue Act, 2024,â added Wetang’ula.
President Ruto had on July 10, 2024, referred back the County Allocation of Revenue Bill, 2024 to the Senate for reconsideration in light of the anticipated fiscal deficit to counties.
The County Allocation of Revenue Bill, 2024 divides the revenue allocated to the county level of government among the counties.
The Bill will be reconsidered by the Senate and National Assembly, aligning it with the revised fiscal framework. This guarantees that county governments will receive the necessary funds for service delivery.
The National Assembly is set to consider a report of the Budget and Appropriations Committee on the Supplementary Estimates I.
The Supplementary Estimates seek to rationalize the FY 2024/25 Budget Estimates to align with the Revised Fiscal Framework and actualize expenditure cuts across the three arms of government, constitutional commissions, and independent offices.