HUGE DEBT

Treasury tells counties to prioritise clearing of pending bills

Others relate to outstanding payments to the Kenya Medical Supplies Agency (Kemsa) for delivery of drugs while the rest is owed to contractors and suppliers

In Summary
  • Approximately 25 per cent of total pending bills estimated at Sh100 billion comprises of unremitted taxes and other statutory deductions
  • Sh50 billion disbursed to hit county accounts by Friday to cover for July and August
Acting Treasury CS Ukur Yatani (Second, Left), KRA board chairman Francis Muthaura and Commissioner General James Mburu during a past event.
Acting Treasury CS Ukur Yatani (Second, Left), KRA board chairman Francis Muthaura and Commissioner General James Mburu during a past event.
Image: COURTESY

The government wants counties to prioritise payment of eligible pending bills estimated at Sh40.5 billion.

Acting National Treasury cabinet secretary Ukur Yatani said this yesterday when he announced disbursement of Sh50 billion to counties after President Uhuru Kenyatta assented to the Division of Revenue Allocation Bill, 2019.

"We expect the Sh50 billion disbursed to hit county accounts by Friday to cover for July and August. We commit to sending more by October 1 to cover for September,’’ Yatani said.

He said approximately 25 per cent of total pending bills estimated at Sh100 billion comprises of unremitted taxes and other statutory deductions, which is an illegality.

Others outstanding dues are payments to the Kenya Medical Supplies Agency (Kemsa) for delivery of drugs and monies owed to contractors and suppliers.

‘’It should be emphasized that such high levels of pending bills generate detrimental economic impact including unrealized targets for collection by Kenya Revenue Authority (KRA) and contraction of activities by the private sector,’’ Yatani said.

KRA commissioner-general James Mburu said counties owe the agency over Sh19 billion in unremitted taxes and vowed to follow up as soon as the fresh allocations hit their accounts.

The signing into law of  the Bill unlocks funds to counties after a two-month stalemate between MPs and Senators that saw counties starved of cash, with some failing to pay salaries.

While the National Assembly was in agreement with the Treasury to allocate counties Sh310 billion as equitable shared revenue, the Senate wanted Sh335 billion in line with the CRA advise.

Yesterday, Treasury said the extended delay in the approval of the Bill has adversely affected the implementation of the counties’ financial year 2019/20 budgets with negative social-economic consequences countrywide.

 

The Treasury is now asking Parliament to expedite the enactment of County Allocation Revenue Bill, which allocates revenue across counties.

Counties have now been allocated a total of Sh378.1 billion for the financial year, of which Sh316.5 is the equitable share of revenue raised nationally while Sh61.6 billion comprises of conditional allocation to counties.

The disbursement of the first bunch of cash to counties this financial year is coming just a day after Chief Justice David Maraga set October 8 as the day the Supreme Court will pronounce itself on the revenue sharing case between the counties and the national government.

In July, the Council of Governors moved to the Supreme Court seeking its advisory on how the State revenues should be shared.