The legislators said the version of the bill signed into law by the President was not the one agreed upon by the two Houses (Senate and National Assembly) during the mediation process.
Treasury says it has already disbursed over Sh50 billion to devolved units for July and August
Counties will now share Sh378.1 billion after President Uhuru Kenyatta finally assented to the controversial Division of Revenue Bill 2019, ending a three-month feud between the two levels of government.
But the Senate has rejected the version of the bill signed into law by the President, accusing him of clawing back the democratic gains made since the promulgation of the Constitution.
From Sh378.1 billion, Sh316.5 (or 84 per cent) is the equitable share of revenue raised nationally, while Sh61.6 billion (or 16 per cent) is conditional allocations to counties.
This is at least Sh18.5 billion less than the Sh335 billion in equitable share that the devolved units were initially demanding. The signing of the bill now paves the way for the release of funds to the counties. President Kenyatta asked the devolved units counties to prioritise settlement of pending bills, which have hurt suppliers and contractors and ended businesses for others. By February, counties owed Sh100 billion in pending bills, out of which Sh40.5 billion was found to be eligible for immediate payment.
A quarter of these arrears comprised unremitted taxes and other statutory deductions, whose delay, according to the National Treasury, constitutes an illegality. Other pending bills relate to outstanding payments to the Kenya Medical Supplies Agency for delivery of drugs and related commodities.
The rest of the arrears comprise dues to contractors and suppliers of goods and services, including utilities such as electricity and water.
With the new law in place, the President reiterated the government’s commitment to scheduled disbursement of funds to enable counties to continue delivering services to Kenyans.