MPs reject plan to give counties 15pc fuel levy

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Economy

MPs reject plan to give counties 15pc fuel levy


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Parliament during a past session. FILE PHOTO | NMG

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Summary

  • Parliament has rejected Treasury’s plan to convert Sh9.4 billion or 15 percent of Fuel Levy Fund as conditional allocations to county governments.
  • In February, the Treasury announced it will drop restrictions on use of Sh17.4 billion for healthcare, roads and education in counties, allowing governors to use the cash on expenditures of their choice including for salaries and perks.

Parliament has rejected Treasury’s plan to convert Sh9.4 billion or 15 percent of Fuel Levy Fund as conditional allocations to county governments.

The Budget and Appropriations Committee (BAC) says the conversion of the allocation to county governments is in contravention of the statute establishing the fund and whose intention is to ring-fence critical financing for road maintenance by both national and county governments.

“The Road Maintenance Levy Fund is one of such fund whose sources of funds cannot be classified as equitable share,” said Kanini Kega, who chairs the committee.

The committee said there is continued inability to oversight the use of conditional grants allocated to counties.

“Conversion of the conditional grants to equitable share will not address this problem. It is important to note that county governments have continued to utilise conditional grants for purposes other than that stipulated under the law in disregard of the Division of Revenue Act and the County Allocation of Revenue Act, and this should be investigated,” Mr Kega said.

In February, the Treasury announced it will drop restrictions on use of Sh17.4 billion for healthcare, roads and education in counties, allowing governors to use the cash on expenditures of their choice including for salaries and perks. Finance CS Ukur Yatani said since the national government has to bear the burden when there is shortfalls in revenues without cutting transfers to counties, it will use conditional grants to make up for the shortfalls.



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