Africa-Press – Kenya. A Senate committee has rejected national government’s bid to control how county governments impose levies, taxes and fees.
The Finance and Budget committee termed unconstitutional, a Bill that gives the government the powers to check how the devolved units impose the charges.
The committee chairperson, Mandera Senator Ali Roba said the County Governments (Revenue Raising Process) Bill, 2023 is a clawback on devolution.
“The committee recommends that the Senate rejects the Bill on the basis that the provisions of the Bill would be a clawback on the powers of county governments to impose taxes, levies and charges under Article 209(3) and (4) of the Constitution,” Roba said.
The state-backed Bill is sponsored by National Assembly Majority Leader Kimani Ichung’wa.
The National Assembly approved the Bill and sent it to the senate for consideration.
It is in the second reading stage.
It seeks to provide for the process by which county governments exercise their power to impose, vary or waive taxes, fees, levies and other charges.
It also proposes to empower Treasury Cabinet Secretary to regulate the process by which county governments impose taxes, fees, levies and other charges.
The Treasury, the Bill states, provides, shall exercise policy oversight and making regulations for implementation of the law once it comes into force.
This includes fees that counties impose on goods like livestock on transit, sand, building stones, murram and soil that move across county borders.
The Bill further provides that the imposition of tax by a county government shall not prejudice national economic policies, trade between counties of good, service or capital.
However, Senator Roba said the proposals violate objects of devolution as set out in the Constitution and in particular self-governance and participation in decision-making.
He said the responsibility for initiating a county government tax proposal rests with the county government and they may propose any tax in accordance with the Constitution.
The Bill proposes establishment of an Inter-Agency Committee headed by Treasury Cabinet Secretary.
It provides that the committee shall consider and approve introduction of new county taxes, fees, levies and charges.
The committee will be responsible for reviewing all fees and charges imposed by the county government prior to the coming into force of the legislation as well as publishing a list of allowable taxes, charges and fees within 30 days of coming into force of the proposed legislation.
The Bill proposes that 10 months before the end of a financial year, a county shall submit a tax proposal to the committee.
The proposal shall contain reasons for the proposed tax, levy or charge, identify people liable, the collecting authority, person responsible for remitting and mechanisms for enforcement as well as the economic impact of the proposal.
The committee argued that the move will be equivalent to usurping the powers of county governments.
The panel said some of the provisions of the Bill already exist in other Acts such as the Public Finance Management Act, 2012 and Intergovernmental Relations Act, 2012.
Roba said that the establishment of the inter-agency committee, whose mandate will be to approve the introduction of new county taxes, fees, levies and charges, is against the spirit of devolution.
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