CRA warns of county cash crunch in revenue row

May 22, 2015 8:44 am
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Cheserem said the hardline stance by the National Assembly and the Senate would delay disbursement of funds/FILE
Cheserem said the hardline stance by the National Assembly and the Senate would delay disbursement of funds/FILE
NAIROBI, Kenya, May 22 – Commission for Revenue Allocation Chairman Micah Cheserem is warning of a financial crisis in the counties if the current stalemate over the Division of Revenue Bill is not quickly resolved.

Cheserem said the hardline stance by the National Assembly and the Senate would delay disbursement of funds urging the six-member mediation committee to come to a compromise over the additional Sh7.7 billion proposed by the Senate.

“The negotiations are taking too long, what figures are we talking about Sh7.7 billion, not a big deal when the budget is Sh2.1 trillion. The more they wait, the more financial year is going to begin and the onus is on the mediation committee to make a decision otherwise there will be a financial crisis,” said Cheserem.

Despite holding several meetings, the mediation committee has failed to come to a consensus over the additional allocation even as the May 25 deadline for when they are expected to submit their reports to the respective Houses fast approaches.

A concerned Cheserem stated that the delay in disbursement of funds would not only affect counties, but the National Government too and proposed that a deal be struck sooner to ensure government activities are not grounded.

“If the Bill collapses it will affect both governments but I don’t think it will reach there, there will be some sober minds and I am sure they can find money within the budget of the national government they can even choose to give a potion of the additional money and we move on,” added Cheserem.

The Intergovernmental Budget and Economic Council had proposed Sh283 billion which was adopted by the National Assembly; however the Senate increased the monies to Sh291 billion resulting in the deadlock.

READ: Senate wants counties to get Sh7.7bn extra

In its defence, the Lower House claimed the Senate had failed to satisfactorily indicate where the extra money would be raised from.

The six member mediation committee comprises Mutava Musyimi, Tom Kajwang’ and Mary Emaase from the National Assembly and Senators Mutahi Kagwe, Boni Khalwale and Beatrice Elachi.

The mediation committee will hold its last meeting Tuesday next week in a last minute attempt to build consensus and resolve the impasse before tabling a report to parliament which has been recalled for a special sitting on the same day.

The Division of Revenue Bill opens the way for the Senate to consider the County Allocation of Revenue Bill which determines how money within the 47 county governments is shared.

The monies in the County Allocation of Revenue Bill will be used by Counties to draw their budgets.

READ: MPs to hold special sittings to beat deadlines

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