President William Ruto formally declined to sign the Finance Bill 2024 following a wave of protests by Kenyans who opposed the bill.
This move came in response to significant public outcry and protests against the proposed tax measures contained within the bill, which many Kenyans felt would exacerbate the already high cost of living.
President Ruto's rejection of the bill has set in motion a series of fiscal and legislative adjustments aimed at ensuring the continuity of government operations while addressing the concerns that led to the bill's rejection.
Ruto declines to sign County Allocation and Revenue Bill Referral
Recognising the interconnected nature of fiscal legislation, President Ruto has referred the County Allocation and Revenue Bill back to Parliament for reduction.
This bill, which was based on expected revenues from the now-rejected Finance Bill, must be adjusted to reflect the new fiscal reality.
Amendments to the Division of Revenue Act
Further, the President has directed the National Treasury to submit amendments to the Division of Revenue Act 2024 to Parliament.
These amendments will reflect the reduced revenues occasioned by the rejection of the Finance Bill, ensuring that the legislative framework aligns with the current fiscal situation.
Focus on Critical and Essential Services
In a bid to prioritise essential government functions, President Ruto has instructed the National Treasury to direct all accounting officers to ensure that only critical and essential services are funded.
This directive stipulates that no more than 15% of the budget should be utilised for these services until the supplementary budget is approved.
This measure is intended to maintain the delivery of vital services while the government navigates the fiscal adjustments necessitated by the rejection of the Finance Bill.
.Constitutional Requirements and Appropriations Bill
In accordance with Articles 221 and 222 of the Constitution, the Appropriations Bill must be assented to by June 30 every year to guarantee the continuity of government operations, particularly in providing critical services.
Recognising the urgency of maintaining government functionality, President Ruto has assented to the Appropriations Bill 2024.
This bill ensures that essential government services continue uninterrupted despite the fiscal challenges posed by the rejection of the Finance Bill.
Supplementary Estimates and Expenditure Reduction
To mitigate the fiscal impact of the rejected Finance Bill, the president has instructed the National Treasury to immediately prepare supplementary estimates aimed at reducing expenditure by the amount of revenue that was expected to be generated by the bill.
The anticipated reduction in expenditure, amounting to Sh346 billion, will be equitably distributed across both national and county governments.
For the national government, this reduction will be borne by the Executive, the Parliament, the Judiciary, and constitutional commissions.