Senators have recommended an amendment to the law to have Kenya Revenue Authority (KRA) collect revenue for counties.
In their radical proposal, the lawmakers argue that county governments are losing revenue running into billions of shillings due to leakages associated with the systems they use.
This includes over-projection, administrative inefficiency, gaps in policy and weak legislation in among devolved units.
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To increase the county own-source revenue and seal corruption loopholes, the legislators want the Public Finance Management (PFM) Act amended to give the taxman powers to collect taxes on behalf of the devolved units.
Contributing to a motion by Vihiga Senator George Khaniri on the continuous failure by county governments to meet their own-source revenue targets, the politicians pressed for counties to enlist the services of KRA to help them achieve their targets.
Led by nominated Senator Agnes Zani, the legislators supported the amendment to the PFM Act so as to have a regulatory system that brings together the Controller of Budget, Kenya Revenue Authority (KRA) and other key players.
The change of law, she said, will enable more regularity, standardisation and efficiency in own-source revenue, that will help counties.
“We will discuss this within the House and come up with a system that is going to be shared across various counties, mobilise and put very well so that the collection of this revenue can be well-managed and so that there is a pattern and standardization across the counties,” Zani said.
On his part, Bungoma Senator Moses Wetangula linked decreasing own-source revenue among counties to the endemic corruption that has ended up denying the citizenry key services.
“Money is, in fact, collected, but it is never declared because it ends up in people’s pockets and private accounts,” Wetangula claimed.
He continued: “The office of the Director of Public Prosecution the Auditor-General, the Director of Criminal Investigations and all these institutions that ought to be looking after public resources had badly let down the country,”
Wetangula, the Ford Kenya Party leader, accused parliamentary and county assemblies watchdog committees for sleeping on their job.
He, however, disagreed with Commission Revenue Allocation policy of punishing counties for failing to achieve revenue targets, terming it punitive and unreasonable.
The senator held the monies that go to the counties for the ordinary people that they represent are for healthcare and agriculture.
“If a governor is reckless or incompetent in collecting taxes, why take away money being allocated from the national government for facilities that reach an ordinary person?” he asked.
“We must find a way of dealing with errant governors and protecting the people in the counties,” he said.
Wajir Senator Ali Abdullahi and his nominated counterpart Mary Seneta also blamed incompetent staff members and lack of transparency in the collection of the revenue as reasons behind declining revenue.
Low revenue collection, they held was causing huge budget deficits which have led to huge bills incurred by the counties.
Senator Khaniri argued that most counties had developed over-dependence in funding from the national government claiming that some counties’ own-source revenue is not even 10 percent of their total annual budget.
If counties increase own-source revenue collection, he noted, they will benefit two-fold, directly from increased funds and from grants from the equitable share raised nationally.
“It has been observed that counties have generally failed to collect the projected own-source revenue since the dawn of devolution in 2013. In most cases, counties are underperforming when compared to the defunct local governments,” Khaniri remarked.
Article 209 (3) of the Constitution gives counties the power to collect revenue through property taxes, entertainment taxes, and any other taxes as authorised by Parliament.
Further, Article 207 (1) also dictates that all counties should establish a County Revenue Fund, where all revenue collected by the county governments should be deposited.
