Home Business Rid Finance Bill of numerous miscellaneous amendments

Rid Finance Bill of numerous miscellaneous amendments

by kenya-tribune

Ideas & Debate

Treasury secretary Henry Rotich presenting the Sh3.07 trillion budget for the financial year 2018/2019 at Parliament Buildings in June. FILE PHOTO | NMG 

In Kenya’s budget-making history, it is a rare occurrence for a President to reject a Finance Bill. In itself, it’s such a unique bill. Simply put, it is a legislative proposal by the National Treasury that sets out the revenue raising measures for the national government together with a policy statement expounding on the same.

But it is one of the many threads of the complex modern national budget-making process, as set out in the gritty Public Finance Management (PFM) Act, 2012.

The process kicks off in February of each year and runs through to September—culminating in the promulgation of the Finance Act.

For the first time in a while, a finance bill was rejected by the President. Subsequently, the President, through a Memorandum to Parliament issued 10 recommendations on the bill.

The fifth recommendation, curiously, touches on the Betting, Lotteries and Gaming Act, which is captured in miscellaneous amendments section (of the Finance Bill).

As has been custom, the finance bill was also used to execute amendments to other financial sector related statutes.

The section has previously originated some very grabby amendment proposals. Famously, it was in the Finance Bill 2015 that the Treasury CS first outlined an ambitious proposal to increase the minimum core capital requirement for banks and mortgage finance companies from the current Sh1 billion to Sh5 billion with December 31, 2018 set as the compliance deadline. In the Finance Bill 2018, the National Treasury Cabinet secretary had proposed over 90 miscellaneous amendments to 10 principal statutes.

But with the President declining to assent to the bill—with a miscellany at the heart of it, isn’t it time all the miscellanies were done away from the finance bill? For instance, in the Finance Bill 2018, there were over 30 amendments proposed under the Betting, Lotteries and Gaming Act (which was the highest). There were slightly over 20 amendments proposed under the Central Bank of Kenya Act and about 12 proposed under the Retirement Benefits Act, 1997.

The touchiest of the amendments, visibly, was the proposal by the Cabinet secretary to repeal Section 33B of the Banking Act. But the touchiness notwithstanding, it’s probably time all the miscellanies were restricted to their principal Acts to, among other things, forestall future unnecessary standoffs between the Presidency and National Assembly.

For instance, if there is an amendment concerning the Banking Act, it should be restricted to the Act in itself (as opposed to stacking them up in the finance bill and incubating a hostage situation).

Incomparably, there were only three principal Acts that were up for amendments namely, the Sacco Societies Act via the Sacco Societies (Amendment) Bill, 2018, the Capital Markets Act through the Capital Markets (Amendment) Bill, 2018 and the Insurance Act via the Insurance (Amendment) Bill, 2018 (stay tuned for my upcoming review of the amendments to the Insurance Act).

Besides expunging miscellanies from the Finance Bill, Parliament also needs to provide timelines within which a bill, once passed, is remitted to the President for assent.

Currently, the law gives the President 14 calendar days to sign or reject a bill, but conspicuously fails to state how long it should take for a bill to be evacuated to the President for the same.

While this has played out for some time, it has turned out to be loophole during the just-ended tiki-taka between the National Assembly and the Presidency over the Finance Bill-and consequently calls for a rethink.

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