Photo/FILE Independent Electoral and Boundaries Commission chairman Issack Hassan. The parliamentary budget office has said the Treasury will have to provide the elections body with at least Sh15 billion to conduct the next General Election.
By ALPHONCE SHIUNDU ashiundu@ke.nationmedia.com
Posted Saturday, April 7 2012 at 22:30
Posted Saturday, April 7 2012 at 22:30
IN SUMMARY
- Besides buying 198,000 ballot boxes, money needed to hire and pay staff, including 90,000 police officers
Kenya’s next General Election will cost an estimated Sh15 billion, Parliament’s budget office says.
This is three times the amount spent on the 2007 General Election. It is also Sh6 billion more than the budget for the August 2010 constitutional referendum that led to the promulgation of a new Constitution three weeks later.
The monumental elections will be held in 290 constituencies and 1,450 wards across the country. Aside from the purchase of 198,000 transparent ballot boxes, the money will be used to hire and pay staff, including 90,000 police officers who are to ensure security in all 45,000 polling stations across the country.
With 20 million voters expected to cast their ballots, the elections will be the ultimate test for the Independent Electoral and Boundaries Commission, which has already entered the murky waters of political public opinion regarding the delimitation of ward and constituency boundaries.
The elections will be the first in Kenya’s history each voter will have to vote six times for six different elective seats.
Kenyans will have to pick the President, Member of Parliament, Senator, County Woman Representative, Governor, and County Assembly Representative. Previously, voters only had to choose the President, MP and Councillor.
The estimated elections budget from Parliament’s budget office comes just 10 days before the House resumes sitting and 20 days to the statutory deadline when Finance minister Njeru Githae has to table the Executive’s budget estimates for the next financial year.
Justice minister Eugene Wamalwa or the acting chairman of the Justice and Legal Affairs Committee Njoroge Baiya will present the Judiciary’s estimates, while Mr Adan Keynan, the vice-chairman of the Parliamentary Service Commission, will present the National Assembly budget. All have to do so by April 30 as prescribed in the Constitution.
It is still unclear how the three arms of government will prepare their budgets given that the Budget Policy Statement – a three-year economic forecast detailing the government’s spending priorities and economic policies – is yet to be tabled in the House.
The supplementary budget – a top-up of the Sh1.15 trillion national budget – has not been presented to the House either.
These two crucial documents ought to have been submitted last month, but neither the Treasury nor Parliament was able to follow the law and tradition.
All these documents are crucial in guiding MPs on how to proceed in allocating money in the resource envelope now that the Constitution grants them the power to prepare the national budget.
Mr Githae will also have a hard time balancing the Treasury’s books, given that the Parliamentary Budget Office has already pointed out that there is a likelihood of a colossal Sh27.4 billion shortfall in revenue collection in the current financial year.
To plug the hole, the Budget Office has called for increased domestic borrowing or cuts in non-priority expenditure.
Domestic borrowing became more expensive with the rise in interest rates, forcing the Treasury to opt for external borrowing.
With the Central Bank base rate standing at 18 per cent, the government may get lucky on that front. But the big question is why the government would go on a borrowing spree just two months to the end of a financial year, in a possible election year.
Several courts have ruled that the election has to be held in March 2013, but there is growing support for a December date this year.
The economists in Parliament have rapped the Treasury for “ambitious” forecasts when it comes to revenue collection and warned that under the new Constitution, the Treasury and the Kenya Revenue Authority must “proceed with caution”.
“It is bad public finance practice to overestimate revenues, as this leads to unpredictability in resource inflows across spending agencies,” the House mandarins said of the Treasury’s methods.
The bad news for Kenyans – nobody likes higher taxes – and the good news for the Treasury – higher taxes mean higher revenues – is that the House team has noted that setting up 47 county governments will pile additional pressure on public coffers.
The team thus has called for either a “change in tax policies” or “higher taxes”. The budget office has also proposed reforms in the tax regime and called on the taxman to seal all loopholes for tax evasion.
It has also asked KRA to bring the “underground economy”, the people in the informal sector, under the tax regime. Tax laws, too, need to be simplified.
“The current mix of tax instruments cannot provide sufficient resources,” the budget office notes in its brief, Managing the Transition-Budget Options for 2012/13 and the Medium Term.
It is inevitable that the Treasury will get the resources because a lot of money is required to run the bureaucracy of a two-chamber Parliament, dozens of constitutional commissions, and to set up and run the 47 county governments.
“The new Constitution has resulted in an increase in expenditure which has resulted in a bulging budget. There’s an increasing pressure on the government to increase tax collection. This translates into an increased burden on taxpayers,” reads the 73-page brief to MPs.
The recurrent budget for Parliament will rise from Sh6.6 billion to Sh11 billion for salaries and allowances for MPs, senators and staff of both the Senate and the National Assembly.
The budget office sets the money required to set up county governments at a minimum of Sh22 billion. The assumption the august House economists have made is that the terms of service of the county representatives will not be at par with those of MPs.
They note that for devolution to work efficiently, the national government will need to send more money to the counties – well above the 15 per cent minimum prescribed by the Constitution.
Currently, the budget office noted, the revenues sent to devolved units are about 19 per cent. It is on this basis that the team, which advises MPs on the making of the budget, wants the revenues to counties “enhanced”.
Noting the concern expressed by experts and other economists about the need for the government to set up structures in the counties early, the budget office has weighed in with a proposal to have officers and offices in the counties – what it calls “secretariats” – by October.
But this will have to wait because the mother law that sets up the structures in the county governments – the County Governments Bill, 2012 – is yet to be assented, following a tiff between the House and President Kibaki regarding the fate of the provincial administration.
Significant change
An obvious significant change in tax policy will be going for the hitherto untaxed perks of constitutional officeholders, plus quashing all tax exemptions.
This means until next June the Treasury will have to make do with meagre tax collections from the emoluments of MPs—the MPs of the Tenth Parliament are exempt from paying tax on their colossal perks, not as a matter of law, but as a matter of government policy.
However, when the next batch of MPs gets elected, they will have to pay tax on all their earnings as prescribed in the Constitution.
Posts
No comments:
Post a Comment