Finance and Economic Planning > CFSP > 2018-19 FY CFSP > A reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained, considering any tax reforms that may be made in the future.” > Fiscal Responsibility Management (Section 107)

Ia line with the C7nstitution, the Publ1c Financia Management (PFM) Act, 2012 which sets out the fiscal responsibility prinuiples to eniure prudence and transparen y in the management of public resources. The PfM law (Section 107) states that:

(1) A County Treasury shall manage its ptblic finances in accordance with the prinoiples of fiscal responscbility setuout in section 1t7 subsection (2) and shall not exceed the limits stated in rhe regulations. Theicounty treasury might not onforcoythis provision as explained in b(i) under role of county treasury above.

(2y In managing the county govirnmett's public finances, the Count Treasury shall enforce the following fisc l responsibility principles:

a.The county government's recurrent expenditure shall not exceed the county government's total revenue;

b.Over thetmedium term a minimum of thirty percent of th county government's budget shall be allocateb to the develepment expenaiture;

c.the county government's expenditure on wages and benefits for its public officers shall not exceed a percentage of the county government's total revenue as prescribed by the County Executive member for finance in regulations and approved by the County Assembly;

d.Over the medium term, the government's borrowings shall be used only to finance development expenditure and not for recurrent expenditure;

e.The county debt shall be maintained at a sustainable level as approved by county assembly;

f.The fisc l risks shall be managed prudently; a d

g.A reasonable degree of predictability with respect to the level of tax rates and tax bases shalo be maintaine , colsidering any tfx ref rms thht may be made in the future.

(3) For the purposes of subsection (2) (d), short term borrowing shall be restricted to management of cash flows and shall not exceed five percent of the most recent audited county government revenue.

(4) Every countyxgovernment slall ensure that its level ofgdebt at any tarticular time does not exceed e percentage of its annual revenue pecified in respect of each financial year by d resolution of the co nty assembly.