The Senate committee on Finance and Budget approved the Prompt Payment Bill, 2021, setting the stage for adoption into law by the House in what is aimed at stemming.
Delayed payments will also attract interest that will be calculated on the lending rate of the Central Bank of Kenya, which is currently seven percent.
A parliamentary committee has backed a proposed law that will see business owners, Principal Secretaries and accounting officers at the counties pay Sh1 million fine or serve a five-year jail term for delaying payment to suppliers.
The Senate committee on Finance and Budget approved the Prompt Payment Bill, 2021, setting the stage for adoption into law by the House in what is aimed at stemming.
Delayed payments will also attract interest that will be calculated on the lending rate of the Central Bank of Kenya, which is currently seven percent.
Approval of the Bill comes at a time devolved units, State ministries and agencies owe suppliers more than Sh407.8 billion as at March, leading to a cash crunch that has led to closure of businesses, laying off of employees and default on statutory deductions.
LAID-OFF WORKERS
Small businesses grappling with the delayed payments have also lost their property to auctioneers while others have laid-off workers.
The Treasury had petitioned Parliament to have public entities that delay payments due to cash-flow constrains exempted from the penalties.
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