Molo Constituency Member of Parliament and Chairman of the Finance Committee in the national assembly Kuria Kimani talks Finance Bill 2025, public participation SHA, and lessons learnt from public protests on punitive tax laws. Mr Kimani retained the committee chairmanship following a round of purges that saw several members removed and replaced with loyalists.
In this Interview, Mr Kuria Kimani talks Finance Bill 2025, Gen Z protests and what to expect in the Finance Bill 2025 and the Budget 2025 and the budget-making process.
On the Budget Making Process In Kenya
Article 220 of the Kenyan Constitution talks about ‘Budget and Spending. It gives room to our legislative framework that sets out when do we do what. And that is contained in our PFM acts that talks about the Budget Making Process – where do we start, where do we end.
Around the 30th of August every year, we have what is called the ‘Budget Circular.’ The Budget Circular is contained in section 35 of the PFM act. This is where the budget process starts. So when you’re talking about the budget for 2025/26 that will kick in from July 1st 2025, the process actually started last year through what’s called the budget circular – through the Budget Review and Outlook Paper (BROP) that is tabled by the September 30 as per section 26 of the PFM Act.
This is a reflection of the actual economic outcome of the previous year and comparing that to the present year and now suggesting an outlook for the next budget. So, it’s like a prediction of what to expect in the budget.
By February 15, we have what’s called the Budget Policy Statement, commonly known as BPS. BPS is contained the PFM Act section 25.2 that sets the ceiling. The ceiling provides for expenditure limits for the next budget. It outlines how much we’re going to spend on education, on health, on roads, etc. This process goes through public participation. So, by April, we already have the ceilings for our expenditures.
This means that by April, we already have ceilings for expenditure on education, on health, on transport, etc. This is then published by the national treasury, then published by the national assembly, and then accommodates public participation meetings that are carried on across the country.
Public participation at this stage requires submission of remarks through email or whichever other forms that parliament may prescribe. According to article 218 of the constitution, it sets out the next step called the Division of Revenue Bill.
The Division of Revenue Bill describes how revenue is shared between the national government and the county government. It is what we call the Horizontal Sharing. And that’s why now you see the back and forth on the amounts allocated to counties. Then after we do the Division of Revenue Bill, we do what’s called in short CARB – County Allocations Revenue Bill. After it’s passed by parliament, it becomes an act – CARA.
The Division of Revenue Bill has a vertical sharing, while CARA has a horizontal sharing; and this is now describes how much each county gets. How much each county gets also as a result of another process that’s done by the Commission of Revenue Allocation that determines what each county gets. How much each county gets is determined by factors including population, health, poverty index, own source revenue – how much the counties generate.
The Committee of Finance and National Planning have actually insisted that we have fiscal discipline as one of the weights for the allocation of monies to counties. But again the measurement of that is something that is not so scientific so it’s it has become a very huge subject of conversation.
After that, by 15th February once we have the budget policy statement, it’s tabled at the same time, with what’s called the MTRS – Medium Term Debt Management Strategy. MTRS sets out how much we anticipate to borrow, domestically and externally, and how much we intend to raise in terms of ordinary revenue.
By the April 30, we have the budget estimates that sets out how much the country spends on which vote. When we do the budget estimates, the budget committee is required to go to 12 counties every year to seek the views of the public. The essence of 12 is so that within at around four budget cycles then the budget committee would have gone through the whole country seeking the views of the public on the budget. This is in addition, to the other views that are sent through email or conversation we have on TV and all that.
The budget estimates, come at the same time with the Finance Bill because we’re saying that now we agree this is our ceilings and we agree on what should go to which vote. We also ask ourselves how we need to raise money to finance particular budget votes. This is by April 30th.
On the Finance Bill 2024 Protests And Whether Views From Those Protests Have Been Accommodated In Finance Bill 2025 & Budget Making Process
I hope I took a lot of time, to explain to as many Kenyan as I could, in as many media as I could, even, people within the digital space. Our numbers were shared online so my phone will ring endlessly and I take my lunch break everyday to answer all the calls that come on my phone.
On the lessons that were learned from it, the four bills that were passed in December all came with explainers and I think failed in how we communicated on the budget making process but then, we all need to start from somewhere. I think as we now start this new budget process, and I and I’m very happy that we have this discussion before these bills are tabled in parliament.
We now have a responsibility of not just educating but helping the public understand this process long before it starts. Because one of the greatest challenges that we got in the last year was that by the time people are learning that there is something called the finance bill, it was at the tail end of the process.
One of the conversations that we are having as a national assembly and as the Committee of Finance and National Planning is that the way public participation has been carried out is so traditional where, where we thought we did score very greatly is calling people for a town hall meeting at KICC. So, the question is, how many people are willing to leave their workplaces to come to KICC and give their views?
We need to have a way of taking the feedback we get from our social media platforms as active public participation. So that we are not saying that you need to write an email. You know There are very many people who rarely do emails.
And so, we want to make this budget making process and public participation much more involving and especially recognizing that there are more ways of public participation that are more effective rather than calling people to a town hall. Although the town hall meeting is important.
On the Role of Public Participation In Budget Making In Kenya
Public’s Participation is still a relatively a new concept in our constitution. We still don’t have a real legal framework in terms of an Act parliament or a law that defines what public participation is about.
So we rely on the court interpretations of what sufficient public participation is and what public participation means. The complexity of a public participation is, if there’s a proposal for a particular matter, and there are four people that supports it and six that don’t. Does it mean that we should take the vote of the four that agree and reject the six?
It’s a quite complicated process. However, from what the cause have interpreted and from global best practice, the first answers is, can we have a debate about it? And the good thing with opening a debate about particular discussion means that people will be aware that in the event that the majority of the voices and the majority of the voices the representatives are mandated to make decisions on behalf of the people.
On Social Health Authority
SHA is a new product. And it has had its challenges. But one of the challenges I’ve seen many from some people is them commenting about SHA not working whereas they are not registered on the SHA platform. And I have specific examples of people I’ve met in my constituency.
Challenge number two is that there was the limitation on the capitation of how much would be paid for what service. And I saw the communicaire by the new CS for health saying that has been improved.
So what we need to identify is what are these gaps that are not being covered by SHA and how do we build how do we bridge them? I know that several patients have been turned down by hospitals because they are owed money by NHIF. Some of these private hospitals feel that if we already have an outstanding payment, pending bill by NHIF, why should I take an additional bill?
Part of what we did in the tax amendment bill of December was to make the rates on the payslip to be tax allowable for PAYE. It had a little saving on our payslips, but I agree that we need to do more. Once we we fix the other systems to make sure they work, then the disposable incomes that we get from our payslips would be sufficient to earn us a living.
Kuria Kimani was speaking to Eric Latiff, Janet Mbugua and Mariam Bishar
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