On Thursday, National Assembly Speaker Moses Wetangula referred President William Ruto’s Memorandum of Referral to Parliament’s Departmental Committee on Finance and Planning, officially kicking off the process of having the controversial bill withdrawn in accordance with the President’s recommendations.

With Parliament currently on recess until Tuesday, July 23, 2024, issues have been raised about how the House will handle the retraction of the aforementioned bill.

Wetangula has subsequently clarified that the House will not be reconvened immediately to examine President Ruto’s memorandum, which further explains the basic legal procedures and ramifications of rejecting the Finance Bill, 2024 for fiscal year 2024/25.

Here are some important things to note:

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

Article 115 of the Constitution authorizes the President to return a Bill to Parliament for reconsideration, noting any reservations the President may have about the Bill.

The reservations will then be considered by Parliament in accordance with Article 115 of the Constitution.

What does the President’s Memorandum recommend to the National Assembly on the 2024 Finance Bill?

The President’s Memorandum has referred the Finance Bill, 2024, back to the House for reconsideration with concerns, recommending that all sixty-nine (69) clauses be deleted.

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

The President’s Memorandum effectively rejects the entire bill. The entire Bill will be lost if the National Assembly approves the President’s reservations and recommendations.

Any Member wanting to overturn the President’s reservations/veto or resurrect any of the Bill’s sixty-nine (69) Clauses must secure the votes of at least two-thirds of the National Assembly, which consists of 233 Members. This is consistent with the stipulations 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 must refer it to the Departmental Committee on Finance and National Planning.

The Speaker has since sent the Memorandum to the Committee for study and report to the National Assembly when it next meets.

If the Committee fails to report to the House at its next meeting, the House will proceed to consider the Memorandum at the Committee of the Whole House upon its return from recess.

What should guide the Committee and the House in considering the President’s Memorandum?

The President’s Memorandum, which recommends the deletion of all sections of the measure, states that it is motivated by the need to reflect the voice of Kenyans who have rejected the measure in its totality. The Committee and the House will consider this justification during their discussions.

What is the relationship between the budget, the finance bill, and the appropriation bill?

The Budget for every fiscal year includes estimates of expenditure for the national government. The approved Expenditure Estimates are turned into an Appropriation Bill, which the National Assembly considers and passes.

Documents supporting the Budget include projections of revenue, loans, and grants needed to fund the Budget for the fiscal year.

Revenue predictions are based on existing tax policies as well as projected revenue-raising strategies that involve new or additional taxes.

A Finance Bill is used to implement new or additional taxation measures, as well as to change current tax measures.

The Finance Bill is a piece of legislation that primarily consolidates the numerous proposed taxation measures aimed at raising additional income to support the budget.

It may result in an increase or decrease in taxes. The numerous revenue-raising measures in a Finance Bill are costed and so included in the Estimates of Revenue.

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 convey to each Member any Message received from the President while the House is not in session, and to report the Message to the House on the following day it meets.

Furthermore, the National Assembly adjusted its calendar and scheduled a brief recess on Wednesday, June 26, 2024.

The House is set to resume normal sessions on Tuesday, July 23, 2024. The Departmental Committee on Finance and National Planning is required to report to the House on the President’s Memorandum on this day.

Can the Finance Bill, 2024 become law by effluxion of time?

Definitely not!

The Finance Bill, 2024, has been returned back to the National Assembly for reconsideration due to the President’s reservations, and thus cannot become law via the passage of time.

What are the implications of the Rejection and Loss of the entire Finance Bill, 2024?

The House is advised that the rejection and loss of the entire Finance Bill, 2024 will result in a financing gap of approximately Ksh.300 billion between the expenditure approved by the National Assembly via the Appropriation Bill, 2024 and the projected revenues that may be raised from existing tax measures.

The next fiscal year will begin in the next four days, on July 1, 2024. The Appropriation Bill, as opposed to the Finance Bill, allows the withdrawal of funds from the Consolidated Fund for national government use.

Notably, the House has already enacted the Appropriations Bill for 2024. The House is advised that the financing deficit can be closed by reducing approved expenditure.

This can be accomplished by passing a Supplementary Appropriation Bill in line with the applicable procedure.