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County governments’ own source revenue could diminish further if Parliament passes a bill that seeks to give National Treasury powers to determine the taxes charged by counties.

The National Treasury-sponsored County Government (Revenue Raising Process) Bill, 2023 proposes to create an inter-agency committee comprising Treasury officials, the Central Bank of Kenya, the Commission of Revenue Allocation and county governments with a mandate to review tax proposals by counties before approval.

The Council of Governors (CoG) Finance Committee chairman Fernades Barasa yesterday faulted the bill terming it unconstitutional and an attack on devolution.

Section 4(1) of the bill makes it mandatory for the county executive members for finance to submit particulars of tax proposals to the National Treasury and the Commission On Revenue Allocation (CRA) ten months before the beginning of a financial year for review.

 For the proposed tax to get approval, it would have to satisfy CRA and the National Treasury that it does not materially and unreasonably prejudice national economic policies, economic activities across county boundaries and national mobility of goods, services, capital or labour.

Barasa said the Finance Committee had submitted a memorandum on the bill to the Senate during its sitting last Wednesday.

“Article 209 is very clear in regard to what counties can do in so far as taxes and levies on property and entertainment is concerned,” he said.

Barasa said the bill proposes to amend the Public Finance Management (PFM) Act so that the national government will create a committee where county representation is a minority.

“It’s is a bill which, in our opinion, should be rejected because it attempts to undermine devolution. We are all aware that counties besides getting equitable share have a responsibility of enhancing our local revenue within the confines of Article 209,” he added.