TERMS OF REFERENCE
CONSULTANCY ON THE DEVELOPMENT OF THE COUNTY REVENUE LAWS
Devolution under Article 209 (3) gives the County Governments the mandate to collect taxes of the following categories “entertainment tax, property tax and other taxes as enacted by an Act of Parliament”. The Fourth Schedule, Part 2 (7) provides for “trade development and regulation including: (a) markets, (b) trade licenses (excluding regulation of professionals), (c) fair trading practices, (d) local tourism, and (e) co-operation societies”. Article 210 of the Constitution provides that “No tax or licensing fee may be imposed, waived or varied except as provided by legislation”. Counties are therefore expected to put in place enabling county legislation, as above, before enacting annual County Finance Bills. The absence of such enabling legislation has led to the first round of county Finance Acts being challenged.
2.0 Statement of the Problem
During the Intergovernmental Budget and Economic Council (IBEC) meeting on 31st January 2014, IBEC directed the Commission on Revenue Allocation (CRA) and the National Treasury to review and approve all county revenue legislation before they are enacted. To spearhead this process, CRA, Council of Governors (COG) and Kenya Law Reform Commission (KLRC) have drafted a Model County Revenue Legislation Handbook to provide guidelines and principles of best practice on putting in place revenue raising measures by county governments.
KAM had engaged the National Treasury and CRA on the development of Model County Legislation generally, and County Finance Bills specifically, because technically, all current county Finance Bills are illegal on two bases: (a) no enabling legislation and (b) lack of public participation (as confirmed by the court on 17th April 2014 in relation to Kiambu County). KAM wants to facilitate the process of assembling the private sector to work with CRA and KLRC to put county enabling taxation legislation on the statute books (Property Taxes, Trade Licenses, Revenue Administration, and Finance Bills) to legitimize all county Finance Bills and the administration of revenue collected.
With the launch of the model revenue laws by CRA on 8 July 2014, Counties are now allowed to borrow from the model and create their own county specific revenue laws. this poses a danger since counties may opt to take the model as it is with no changes and use it in their counties or they may wait for one county to domesticate the model in a manner that suits that county then copy and paste as their own law in a manner that does not match the uniqueness of those other counties. The domestication of the model laws to the forty seven counties needs to be done in a manner that does not disrupt trade within counties and across the counties.
3.0 Objective of the Project
The objective of this project is to put in place enabling county taxation legislation such that the business environment is consistent throughout the entire country.
The ultimate objective is to ensure that there are legitimate Finance Acts in all counties based on consistent enabling legislation that is also consistent with a common business enabling environment as per the annual County Fiscal Strategy Paper and Section 117 of the Public Finance Management Act. A by-product of this project, it is anticipated, will be a stronger, more unified, and more effective private sector BMO coalition structure in place so that a stronger Private Sector (BMOs/CSOs) can interrogate proposed Finance Bills in line with agreed public participation process.
This project is estimated to last for a period of 12 months from 1st September 2014 to 31st August 2015.
5.0 Expected output
The project is divided into seven main activities and that shall require a pool of sixteen consultants to work with various counties in eight regions throughout the country. The consultants will each be engaged on individual contractual basis, and assigned various tasks in any of the seven activity areas. These activities are:
Activity 1: Identification (in partnership with BAF, CRA and KLRC) of a pool of suitable consultants to undertake this project. The consultants will be briefed and will jointly plan how to deliver the project.
Activity 2: KAM through its consultants and other BMOs will construct a common position on the extent to which the draft generic county revenue legislation needs to be customised to ensure a common business environment across the country.
Activity 3: Organise 8 regional 3-day workshops:
Day 1: awareness creation for CEOs of county-based anchor BMOs on how to advocate effectively and how to build effective coalitions. This session will also discuss the process of engaging the county governments on the Revenue Bills, and agree on what to look out for in the Bills.
Day 2: hold a meeting between BMOs and County-Executives in-charge of Finance, county Directors of Finance and Chairs of the Finance Committees in the County Assembly to:
1. Discuss the model county revenue laws and agree to ensure that the drafts are consistent across the country.
2. Introduce the coalition of BMOs as partners from the private sector to assist in the process.
3. Agree on the modality for sufficient public participation in the legislative formulation and how the BMOs, County Governments, CRA and KLRC will work together to ensure that the County Revenue Bills are of good quality and are constitutional.
Day 3: Develop a county implementation plan for the project
Activity 4: Hold several working meetings with the County Assembly and County Finance Executives preferably in the county offices/board room (to minimise costs) to develop the revenue legislation. This process will be undertaken in collaboration with legal drafters from CRA and/or KLRC; anchor county BMOs and supported by KAM’s team of consultants
Activity 5: Engage all relevant county stakeholders (county assembly, rate payers and business community) through public participation to get buy-in of the legislative proposals that should inform the outcome of the various county revenue laws.
Activity 6: Anchor BMOs and the coalition of BMOs to lobby for the enactment of the legislation by the County Assemblies.
Activity 7: Develop a framework for information sharing through a devolution portal.
The devolution portal will be an interactive platform for information sharing between the BMOs, County Governments and Constitutional Implementation Bodies.
6.0 Qualifications of Consultant
1. Graduates in Economics, Finance, Research or Law with five years working experience. Masters will be an added advantage.
2. Experience working with the County Government(s), legislative drafting and advocacy relating to enabling business environment will be an added advantage.
3. Consultants must uphold chapter six of the constitution.
4. Must be able to travel across the country to work with various County Executives of Finance to develop the various revenue laws.
5. Excellent mastery of the Constitution and the Constitution Implementation Laws.
6. Women and persons with disability are encouraged to apply
Except with the consent in writing of either Party the other Party shall not disclose any details on this project to any person, other than a person employed or engaged by that Party in the carrying out of the Contract.
Any permitted disclosure shall be made in confidence and shall extend so far only as may be necessary for the purpose of this project and as specified in the individual consultant’s contract.
Interested parties should submit sealed copies of the following in duplicate:
- Technical and financial proposals
- Certificate of Incorporation
- Tax Compliance
- PIN Cert./VAT Reg. Cert
The documents should be delivered to AAM resources, Purshotam House, Chiromo Lane, Next to Diagnostics centre, on or before 3.00p.m. Friday 19 September 2014. Late submissions will not be opened.
The contacts persons for this exercise at KAM will be: