Impeachments, revenue sharing formula wrangle top Parliament business

It was a dramatic year in Parliament that saw counties endure a four month wait for their equitable share of revenue as Senators failed to agree on the sharing formula needed to unlock the release of the funds.

Legislators were also kept busy impeaching two governors and letting another off the hook.

It was the stalemate over the resource sharing formula that caused the most noise in the Senate, however, with interested parties trading barbs over the one man one shilling slogan that dominated the airwaves for weeks.

The standoff left the devolved units in near operational shutdown as the release of the first tranche of the Sh316.5 billion delayed from July to October.

The Senate was for months divided on grounds that the new formula that places more weight on population would deny less populous counties billions of shillings.

It took the Senate a record 10 failed attempts to break the revenue sharing impasse that culminated in the retention of the old formula that has been used for the last five years.

In September, Senators finally struck a deal and approved the new revenue-sharing law that had stalled the passage of the County Allocation of Revenue (CAR) Bill 2020.

The Bill provides for the sharing of revenue raised nationally among county governments as well as guides the release of cash to counties from the Consolidated Fund.

However, the delays in passing the revenue-sharing formula was not the only hurdle in Parliament this year.

President Uhuru Kenyatta squared it out with MPs after he rejected a Bill that would have awarded former MPs Sh100,000 in monthly pension for life, saving taxpayers billions of shillings and safeguarding the independence of the Salaries and Remuneration Commission (SRC).

The National Assembly had in August approved the Parliamentary Pensions (Amendment) Bill, 2019, which sought to increase the minimum monthly pension for lawmakers who served between July 1, 1984 and January 1, 2001.

The more than 375 former MPs would have seen their monthly pension rise to above Sh100,000 from the current Sh33,000.

Mr Kenyatta, however, has declined to sign the Bill into law, arguing that it would add an unwarranted Sh444 million annual tax burden on taxpayers.

Mr Kenyatta also vetoed the Law of Contract Bill handing huge relief to lenders as the law would have compelled creditors to seize assets of defaulting borrowers before touching a guarantor’s property.

In rejecting to assent to the Law of Contract Bill 2019, Mr Kenyatta argued the Bill would prejudice the financial sector and adversely affect credit advanced to micro, small and medium enterprises.

The House passed several crucial pieces of legislation despite its business being thrown into a spin after Kenya recorded its first case of Covid-19 pandemic in March.

The outbreak of coronavirus forced Parliament to amend its rules to allow for virtual sittings of the House and its committees from May 18.

The Bills include the Tax Laws (Amendment) Bill 2020 that saw workers, households and businesses given income and value-added tax (VAT) cuts to cushion them from the impact of the coronavirus crisis.

MPs, however, repealed the April Bill last week, returning VAT to 16 per cent from 14 per cent while businesses will pay corporate tax of 30 per cent instead of 25 per cent from January 1.

The maximum personal income tax has also been reinstated to 30 per cent from the current 25 per cent.

Small traders like salons and groceries will also start paying tax at the rate of three per cent from one per cent of their gross sales when the Covid tax reliefs are scrapped.

The tax reliefs were aimed at lowering the cost of basic items while providing workers with additional income to spur consumption and boost retailers’ flagging sales.

The House passed several other key Bills that include Business Laws (Amendment) Bill, the Public Finance Management (Amendment) Bill and the County Outdoor Advertising Control Bill all aimed at easing the cost of doing business in Kenya.

However, at the National Assembly, MPs failed to pass a Bill that seeks to return the national carrier, Kenya Airways to government ownership.

Despite a plea by President Kenyatta during the State of the Nation’s Address from Parliament, MPs failed to enact the National Aviation Management Bill 2020 and the Business (Amendment) Bill No. 2 of 2020.

Mr Kenyatta said the passage of the National Aviation Management Bill 2020 would bolster plans to turnaround the operations of the debt-ridden airline.

The Bill proposes that KQ becomes one of three subsidiaries in an Aviation Holding Company.

The others would be Kenya Airports Authority, which will operate all the country’s airports, including Jomo Kenyatta International Airport in Nairobi, under an investment arm dubbed Aviation Investment Corporation.

The Bill flew into headwinds in September after a section of MPs raised a question of the lack of input by Kenyans and other stakeholders in line with the Constitution.

At the Senate, lawmakers started and closed the year by impeaching Kiambu and Nairobi governors Ferdinand Waititu and Mike Sonko respectively.

Mr Waititu was thrown out of office on January 28 after the Senate backed Kiambu County assembly members who accused him of abuse of office and other crimes.

The Senate on voted on December 17 to uphold charges levelled against Mr Sonko after some 88 out of Nairobi’s 122 MCAs voted on December 3 to impeach him on grounds of gross violation of the Constitution and other laws, abuse of office, commission of crimes and lacking the mental capability to run the county government.

However, an attempt by the Kirinyaga County Assembly to impeach governor Anne Waiguru failed at the floor of the Senate.

The assembly had voted to send her packing on charges of corruption and abuse of office, where she was accused of rigging county government tenders and receiving payments for foreign trips she didn’t make.

An 11-member Senate Committee, however, ruled that the county assembly had not proved any of these charges.

House leadership posts and committees were also the scene of a brutal cull on those deemed to be lukewarm in their support of the President’s agenda.

This saw the ouster of Leaders of Majority Aden Duale (National Assembly) and Kipchumba Murkomen (Senate), replaced by Amos Kimunya and Samuel Poghisio respectively, as well as several committee chairpersons and parliamentary whips.