𝐒𝐨 𝐰𝐡𝐚𝐭 𝐡𝐚𝐩𝐩𝐞𝐧𝐬 𝐧𝐞𝐱𝐭 𝐚𝐟𝐭𝐞𝐫 𝐭𝐡𝐞 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐀𝐬𝐬𝐞𝐦𝐛𝐥𝐲 𝐫𝐞𝐜𝐞𝐢𝐯𝐞𝐬 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭’𝐬 𝐌𝐞𝐦𝐨𝐫𝐚𝐧𝐝𝐮𝐦 𝐢𝐧 𝐫𝐞𝐬𝐩𝐞𝐜𝐭 𝐨𝐟 𝐭𝐡𝐞 #𝐅𝐢𝐧𝐚𝐧𝐜𝐞𝐁𝐢𝐥𝐥𝟐𝟎𝟐𝟒?

The Speaker of the National Assembly has issued an Explainer on the Basic Applicable procedure and İmplications of the Rejection of the #𝐅𝐢𝐧𝐚𝐧𝐜𝐞𝐁𝐢𝐥𝐥𝟐𝟎𝟐𝟒 on the FY 2024/25 Budget, as follows:

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐩𝐫𝐨𝐜𝐞𝐝𝐮𝐫𝐞 𝐟𝐨𝐫 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭’𝐬 𝐌𝐞𝐦𝐨𝐫𝐚𝐧𝐝𝐮𝐦 𝐭𝐨 𝐚 𝐁𝐢𝐥𝐥?

-Article 115 of the Constitution empowers the President to refer back a Bill to Parliament for reconsideration, noting any reservations that the President may have concerning the Bill. Thereafter Parliament is required to consider the reservations in the manner provided for under Article 115 of the Constitution.

𝐖𝐡𝐚𝐭 𝐡𝐚𝐬 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭’𝐬 𝐌𝐞𝐦𝐨𝐫𝐚𝐧𝐝𝐮𝐦 𝐫𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐀𝐬𝐬𝐞𝐦𝐛𝐥𝐲 𝐢𝐧 𝐫𝐞𝐬𝐩𝐞𝐜𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐁𝐢𝐥𝐥, 𝟐𝟎𝟐𝟒?

-The President’s Memorandum has referred the #𝐅𝐢𝐧𝐚𝐧𝐜𝐞𝐁𝐢𝐥𝐥𝟐𝟎𝟐𝟒 back to the National Assembly for reconsideration with reservations recommending the DELETION OF ALL SIXTY-NINE (69) CLAUSES of the Bill.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐞𝐟𝐟𝐞𝐜𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭’𝐬 𝐌𝐞𝐦𝐨𝐫𝐚𝐧𝐝𝐮𝐦 𝐨𝐧 𝐭𝐡𝐞 𝐁𝐢𝐥𝐥 𝐚𝐧𝐝 𝐜𝐚𝐧 𝐭𝐡𝐞 𝐁𝐢𝐥𝐥 𝐛𝐞 𝐫𝐞𝐯𝐢𝐯𝐞𝐝?

-The President’s Memorandum constitutes a REJECTION OF THE BILL IN ITS ENTIRETY. The effect is that the entire Bill will be LOST upon approval of the President’s reservations and recommendations by the National Assembly.

-Any Member intending to negate the President’s reservations/veto or revive any of the sixty-nine (69) Clauses of the Bill is required to marshal the votes of at least two-thirds (2/3) of the Members of the National Assembly, being 233 Members.

This is in keeping with the provisions of Article 115(4)(a) of the Constitution.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐧𝐞𝐱𝐭 𝐜𝐨𝐮𝐫𝐬𝐞 𝐨𝐟 𝐚𝐜𝐭𝐢𝐨𝐧?

-Upon receipt of the President’s Memorandum, the Speaker of the National Assembly is required to refer the Memorandum to the Departmental Committee on Finance and National Planning. The Speaker has since referred the Memorandum to the Committee for consideration and reporting to the National Assembly when it next sits.

-In the event the Committee fails to report to the House at its next sitting, the House shall proceed and consider the Memorandum at Committee of the Whole House upon resumption from recess.

𝐖𝐡𝐚𝐭 𝐬𝐡𝐨𝐮𝐥𝐝 𝐠𝐮𝐢𝐝𝐞 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭’𝐬 𝐌𝐞𝐦𝐨𝐫𝐚𝐧𝐝𝐮𝐦?
-The President’s Memorandum recommending deletion of all clauses of the Bill notes that it is informed by the need to REFLECT THE VOICE OF THE PEOPLE OF KENYA who have REJECTED the Bill in its ENTIRETY.

– The Committee and the House shall take this justification into account in their deliberations.

𝐖𝐢𝐥𝐥 𝐭𝐡𝐞 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐀𝐬𝐬𝐞𝐦𝐛𝐥𝐲 𝐛𝐞 𝐫𝐞𝐜𝐚𝐥𝐥𝐞𝐝 𝐭𝐨 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭’𝐬 𝐌𝐞𝐦𝐨𝐫𝐚𝐧𝐝𝐮𝐦?

-Standing Order 42(3) of the National Assembly Standing Orders requires the Speaker to transmit to every Member any Message received from the President at a time when the House is not in session and to report the Message to the House on the day it next sits.

-The National Assembly altered its Calendar and proceeded for a short recess on Wednesday, 26th June 2024. The House is scheduled to resume its regular sittings on Tuesday, 23rd July, 2024. The Departmental Committee on Finance and National Planning shall be required to report to the House on the President’s Memorandum on this day.

𝐈𝐬 𝐭𝐡𝐞𝐫𝐞 𝐚 𝐩𝐫𝐞𝐜𝐞𝐝𝐞𝐧𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐏𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭 𝐫𝐞𝐣𝐞𝐜𝐭𝐢𝐧𝐠 𝐚𝐧 𝐞𝐧𝐭𝐢𝐫𝐞 𝐁𝐢𝐥𝐥?
𝐘𝐄𝐒. It is not unusual for the President to refer a Bill back with reservations recommending its rejection through deletion of all of its Clauses. The National Assembly has previously received and considered President’s reservations recommending the deletion of all clauses in a Bill during the 11th and 12th Parliaments.

-In particular, the House received and considered reservations relating to the Central Bank (Amendment) Bill (National Assembly Bill No. 28 of 2014) and the Law of Contract (Amendment) Bill (National Assembly Bill No. 1 of 2019). In both instances, the House failed to marshal the votes of two-thirds of the Members of the National Assembly required to veto the President’s recommendations.

𝐂𝐚𝐧 𝐭𝐡𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐁𝐢𝐥𝐥, 𝟐𝟎𝟐𝟒 𝐛𝐞𝐜𝐨𝐦𝐞 𝐥𝐚𝐰 𝐛𝐲 𝐞𝐟𝐟𝐥𝐮𝐱𝐢𝐨𝐧 𝐨𝐟 𝐭𝐢𝐦𝐞?
-𝐄𝐦𝐩𝐡𝐚𝐭𝐢𝐜𝐚𝐥𝐥𝐲, 𝐍𝐨! Having been referred back to the National Assembly for reconsideration on account of the President’s reservations, the Finance Bill, 2024 cannot become law through mere lapse of time.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐥𝐢𝐧𝐤 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐭𝐡𝐞 𝐁𝐮𝐝𝐠𝐞𝐭, 𝐭𝐡𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐁𝐢𝐥𝐥 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐀𝐩𝐩𝐫𝐨𝐩𝐫𝐢𝐚𝐭𝐢𝐨𝐧 𝐁𝐢𝐥𝐥?
-The Budget for any financial year comprises Estimates of Expenditure for the national government. The approved Estimates of Expenditure are translated into an Appropriation Bill for consideration and passage by the National Assembly.

-Documents supporting the Budget contain also projections of revenue, loans, and grants required to finance the Budget for a Financial Year. The projections of revenue are derived from existing tax measures and proposed revenue-raising measures through new or additional taxation. Any new or additional taxation measure and any variation to existing tax measures are introduced through a Finance Bill.

-The Finance Bill is a piece of legislation that largely consolidates the various proposed taxation measures intended to raise additional revenue to support the budget. It may lead to an increase or reduction of taxes. The various revenue raising measures in a Finance Bill are costed and therefore constitute part of the Estimates of Revenue.

𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐢𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐑𝐞𝐣𝐞𝐜𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐋𝐨𝐬𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐞𝐧𝐭𝐢𝐫𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐁𝐢𝐥𝐥, 𝟐𝟎𝟐𝟒?
– The House is guided that the rejection and loss of the entire Finance Bill, 2024 shall occasion a financing gap of approximately Kshs. 300 Billion between the expenditure approved by the National Assembly through the Appropriation Bill, 2024 and the projected revenues that may be raised from the existing tax measures.

-The next Financial Year shall commence in the next four days, being 1st July 2024. The instrument which authorizes the withdrawal of monies from the Consolidated Fund for utilization by the national government is the Appropriation Bill, which is distinct from the Finance Bill.

-Notably, the House has already passed the Appropriation Bill, 2024. The House is guided that the financing gap may be bridged by the reduction of approved expenditure. This may be achieved by enacting a Supplementary Appropriation Bill in accordance with the applicable procedure.