Kakamega opposes bill seeking control of county taxes by Treasury

The Kakamega government has opposed attempts by the National Treasury to control the collection of taxes, fees and levies by counties.

Deputy Governor Ayub Savula said the County Governments (Revenue Raising Process) Bill, 2023, sponsored by Majority leader Kimani Ichung'wah is against the spirit of devolution and unconstitutional.

Savula said county governments are autonomous in their own revenue collection and attempts to have the National Treasury determine which taxes, fees and levies should be imposed by devolved units amounts to interference with devolution.

“We will not allow the national government to take away the county’s oversight role from county assemblies as enshrined in the Constitution,” he said.

Savula was speaking on Wednesday during the funeral service for Isaac Fumwa at Mung'ang'a village in Mumias East subcounty.

The bill sponsored by Ichung'wah seeks to compel governors to seek approval from the National Treasury before imposing taxes, fees and levies on their respective counties.

It provides that counties first submit proposed taxes, fees, levies, or any charges they intend to impose to the National Treasury and the Commission of Revenue Allocation for approval.

The proposed law grants sweeping powers to the National Treasury Cabinet Secretary who will determine whether counties should charge a particular levy.

Counties would have to explain to the Treasury and CRA why they are imposing a tax, levy, fee, or charge.

But Savula said that counties will go to court to block illegal schemes to control operations in counties through the backdoor.

He said own source revenue is critical in operations in counties given the erratic manner in which the shareable revenue disbursement is done.

The deputy governor said the attempt by the state to seize control of revenue collection by counties is aimed at killing devolution.

He said devolution has been frustrated by the national government through erratic disbursement of shareable revenues and passage of such laws under the guise of regulations on imposing taxes would further cripple it.

“Any such measures being proposed by the national government can only come through constitutional amendments where Kenyans will decide on their own and not an individual,” he said.

In his memorandum of reasons, Ichung’wah says the bill would define the “manner in which the national government, through the National Treasury, may exercise its policy oversight role".

“The bill regulates the exercise by county governments of their power to impose taxes, levies, and duties by providing for the compliance by a proposed county government tax, fee, levy or charge,” the Kikuyu MP said.

He said the bill does not set specific taxes that counties may enact, emphasising that the responsibility of initiating tax proposals rests with the devolved units.

“Rather, the bill regulates the process by which county government taxes are imposed,” Ichung’wah explains in the memo.

Residents in various counties have in recent past been complaining of over taxation by counties.