How Does the Government Come up With a Finance Bill?

July 10, 2024

Have you ever wondered how the government decides how to manage the country’s money and taxes? It’s a fascinating process that starts with something called a Finance Bill!

What is a Finance Bill?

A Finance Bill is like a big plan that the government creates to manage the country’s money. It explains how the government plans to collect money through taxes and other ways and how it will spend that money on important services and projects. Think of it as a detailed budget for the entire country!

 Where Do the Ideas Come From?

Every year, the government thinks about how to manage the country’s finances better. These ideas can come from the Prime Minister, the Cabinet, or even individual Members of Parliament (MPs). Sometimes, regular people like you and me can also suggest ideas that the government might consider for the Finance Bill.

 The Journey of a Finance Bill

  1. Writing the Bill:

   Once the government has an idea for a new money or tax law, they write it up as a Finance Bill. This is the very first step in the process.

  1. First Reading:

   The Finance Bill is introduced in Parliament. This step is called the First Reading. At this stage, the bill is just presented, and there isn’t much discussion yet.

  1. Second Reading:

   Next, MPs discuss the bill in detail during the Second Reading. They talk about it and suggest changes to make it better.

  1. Committee Stage:

   A small group of MPs looks at the bill really closely, examining it line by line. They can make changes to improve it.

  1. Report Stage:

   After the Committee Stage, the bill goes back to the full Parliament for the Report Stage, where more changes can be added if needed.

  1. Third Reading:

   Finally, Parliament has a final vote on the bill during the Third Reading. If most MPs agree, the bill passes this stage.

 The President’s Role

Even after Parliament approves the bill, it still isn’t a law. The Finance Bill goes to the President, who can either sign it into law or send it back to Parliament with some suggestions for changes. If the President signs it, the bill becomes a law. This is called Presidential Assent. If the President sends it back, Parliament must look at the bill again and make any necessary changes before sending it back to the President for approval.

Why is This Important?

Turning a Finance Bill into a law is important for our country. It ensures that the government’s plans for managing money and taxes are carefully examined and discussed by Parliament. This helps make sure that the final law is fair and works well for everyone in the country.

So, the next time you hear about a Finance Bill, remember the exciting journey it has to go through before it becomes a law!

Written By Shilla Lwangu and Alice Njoki

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