Treasury Cabinet secretary Ukur Yatani will not read the Sh3.31 trillion budget for the financial year starting July on April 7 unless Parliament approves a Bill that shares revenue between counties and the national government.
Speaker Justin Muturi told Parliament that unless the Division of Revenue Bill, 2022 is passed, “it will be unconstitutional for Mr Yatani to deliver the budget highlights”.
The Bill spells out how revenue raised nationally will be shared between the national and county governments.
The High Court in 2020 ruled that the Division of Revenue Bill must be approved by Parliament before the tabling of Budget Estimates and reading of budget speech.
A three-judge bench in a High Court petition number 277 and 232 of 2019 ruled that future budget policy pronouncements unveiled in Parliament without the inclusion of the division revenue bill will be unconstitutional.
The Division of Revenue Bill, which MPs have approved, is currently stuck at the Senate.If the Senate proposes amendments, the Bill will head to mediation where an equal number of members from both Houses will be picked to hammer out an agreeable version.
If one of the two Houses rejects the mediated version of the Division of Revenue law, the Bill will be lost and can only be reintroduced after six months.
“Unless something happens, anything else being proposed will be in violation of the High Court ruling and we cannot allow the Cabinet Secretary to give budget highlights or table budget estimates before the outcome of the Division of Revenue Bill which is in the Senate is known,” Mr Muturi told MPs.
“The Cabinet Secretary has been notified that there is a looming danger that will not even allow him to set his foot here. It’s the right of the other House (Senate) to tinker with the Division of Revenue Bill as they please. We wait for them to bring it back,” Mr Muturi ruled.
The Treasury wants to deliver the Budget Statement two months earlier than traditional time in June.
Parliament term ends two months to the August polls, meaning the House must clear all important business before June 9.
Mr Yatani had confirmed that he will deliver the Budget Statement for the financial year 2022/23 on April 7, marking the last expenditure plan for President Uhuru Kenyatta who will leave office after the August 9 polls.
The budget for the year beginning July has been fast-tracked to enable timely approval of the estimates of revenue and expenditure to be included in the Appropriation Bill.
The passage of the Appropriation Bill by MPs and subsequent signing into law by President Kenyatta is what will authorise the Executive, Parliament and the Judiciary to withdraw cash from public coffers for the day-to-day running of their programmes.
Failure to pass the key legislation, under Article 221 of the Constitution, will, therefore lead to cash crisis for key government activities in the year starting July, including funds for general elections on August 9.
Mr Muturi made the ruling following concerns raised by Garissa Township MP Aden Duale on the legality and constitutionality of Mr Yatani reading the budget on April 7 given the ruling of the High Court.
Mr Duale said once the Budget Policy Statement (BPS) has been approved, the next step is approval of the Division of Revenue Bill and County Allocation of Revenue Bill.
“Then, the Budget Estimates can be tabled, considered and approved. This is the only time the House can allow the Treasury to make policy pronouncements and revenue-raising measures in the form of a budget statement,” Mr Duale said.
Mr Muturi said the House Business Committee (HBC), the top decision organ that sets the day-to-day agenda of the House, has advised the Treasury to lobby the Senate to expedite passage of the Division of Revenue Bill as passed by the National Assembly.
“Failing which it will be subject to vagaries of mediation. Let us see the outcome of the Bill from the Senate. That is the most critical thing because we cannot violate the High Court ruling which has not been challenged,” Mr Muturi said.
He said the House had received a letter from Mr Yatani proposing to deliver a budget policy statement on April 7 before the House went on a short recess late last month.
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