A storm is brewing after Governor Lee Kinyanjui returned the controversial Nakuru Finance Bill 2018 to the assembly for further consideration after the MCAs cut fees like parking, business licences, rent and market rates.
Mr Kinyanjui said the Bill approved by the MCAs will reduce the county’s revenue by nearly half and ultimately impart negatively on service delivery. The governor is now headed for a showdown with the MCAs who are keen on lower rates to appease the electorate and business people.
The Bill provides revenue generation measures relating to county taxes, licences, fees and charges.
While returning the Bill, Mr Kinyanjui cited two areas which he wants the 78-member assembly to address before he approves it. “The Bill as it is contravenes provisions of Article 210 of the Constitution on imposition of tax,” said Mr Kinyanjui. At the same time he faulted the Bill saying it overlooks recommendations of Finance and Planning executive Joseph Kiuna.
The MCAs had unanimously passed the Bill which had far reaching financial implications as it reduces a number of licence fees and taxes.
However, while returning it, Mr Kinyanjui said “the Constitution is clear that no tax or licensing fee may be imposed, waived or varied except as provided by the legislation.” He argued that the amount of revenue to be raised, if he ascends the Bill, is inconsistent with provisions of the approved County Fiscal Strategy Paper.
“In reducing the charges for various areas, for example rental income and parking fees, the Bill is conflicting with of the said paper,” said Mr Kinyanjui.
He further argued that the Bill violates provisions of the Public Finance Management Act. The Act stresses that the total amount of revenue raised should be consistent with the fiscal framework and the County Revenue allocation Act.
Mr Kinyanjui poked holes in the Bill saying it did not factor in provisions of Section 120 of the County Governments Act in so far as guidelines on tariffs and pricing of public services are concerned.
“For a tariff policy to be adopted, for example market fees, the amount the traders pay for services should generally be in proportion to their use of that service,” emphasised Mr Kinyanjui.
He said that the county has to pay for electricity and water being utilised in the market and tariffs for these utilities have not been reduced, and if the market fee charged to the traders is reduced it will drastically hamper the provision of these services.
Mr Kinyanjui wondered why the Bill was lacking the commencement date when provisions of the Bill will be implemented.