Huge pending bills crippling businesses, hurting tax cash

The Controller of Budget (CoB) Margaret Nyakang'o has noted an increase in pending bills as of June 30, 2023, warning that the move not only cripples business entities in the country but also the government due to delayed tax submissions.

Ms Nyakang'o identified government agencies diverting payments meant for pending bills to other uses as one of the key factors that have led to the delays in the payment of bills.

Political interference has also been cited as a key issue as new governments are not ready to take up the obligations of the previous administrations.

"This has a lot to do with integrity because there are suppliers who could use underhand ways of getting advantage and get paid and still leave all the bills outstanding. We also have Ifmis-related challenges. Like at the beginning of the Kenya Kwanza administration, there was a period of freeze on transactions yet they were going on,'' she said

During the supplementary budget, NYS (National Youth Service) was allocated Sh1 billion to pay pending bills and an additional Sh2 billion in the financial year 2022/2023 leaving a balance of Sh2.3 billion.

Senate Public Accounts Committee Chairperson Moses Kajwang said Parliament is working with the State to ensure the processes and procedures for the requisition of funds are automated for accountability purposes.

He argued that the move would reduce turnaround time. He said the same has been fought by the National Treasury.

Kajwang accused the Treasury of fighting to maintain the manual procedure since the new system is efficient and would mean that counties get money on demand.

"They favour the manual system because it can be easily frustrating. Officers in the counties have found a way to beat around the system. They will make all the proper and right requisitions to the office of the CoB and then once the funds are released to them, they have the capability to decide to misallocate the money to their own paid projects,'' he said

"We want to automate the processes and the procedures for requisition of funds so that once a county has indicated to the CoB that we are going to pay for the stalled stadiums when that money comes it cannot be used otherwise.''

Kajwang observed that the committee will make it mandatory for the outgoing administration to hand over to the new one its assets and liabilities.

It has been a cycle of different regimes trying to look into the pending bills problem as investors continue to languish in debt.

On June 27, this year, President William Ruto formed another multi-stakeholders team to verify all pending bills noting that they remain a sticky issue.