18 counties to share Sh6.8b as reward for increasing revenue collection

‎The Treasury will award Sh6.8 billion to 18 counties for growing revenue collection.

The counties will benefit from the funds which are part of the fiscal responsibility allocation disbursed to counties that increased their local revenue collection.

Baringo, Bomet, Bungoma, Embu, Kericho, Kilifi, Kisumu, Lamu, Machakos and Makueni counties will benefit from the windfall that will reflected in the next financial year.

Others are Marsabit, Meru, Mombasa, Nandi, Nyandarua, Samburu, Siaya and Turkana.

An analysis of the local revenues collected by the counties in the last financial year indicates they were the only devolved units that increased local revenues against a trend that saw counties miss their annual local revenue target by 56.4 per cent.

Collectively, county governments only managed to collect Sh32.52 billion against a target of Sh57.66 billion and only Marsabit and Turkana surpassed their revenue targets.

As under-performance in local revenue collection continues to haunt the devolved units, Commission on Revenue Allocation (CRA) Director of Research and Policy Lineth Oyugi said the remaining 29 counties would not get a dime under the fiscal responsibility allocation.

“Only 18 counties increased their revenue in the last financial year, so in effect they are the only counties that will share out the Sh6.28 billion,” she said.

The fiscal responsibility allocation, Ms Oyugi said, accounted for two per cent of equitable share of revenue allocated to county governments.

In the coming financial year, the equitable share has been increased by 4 per cent from Sh302 billion in 2017/18 to Sh314 billion.

“Both the national and county governments have revenue collection targets. Even though both can miss the targets, you can never hear that the national government collected less money in subsequent years. So counties should also work so that their collection does not reduce,” Ms Oyugi said.

CRA proposed the formula to reward counties that made an effort to increase their locally generated revenues.

The funds are divided based on the amount of money collected per the population in the county.

“We find out how much the counties collected and banked in the consecutive years and share it out to the counties on account of their fiscal efforts,” Ms Oyugi said.

Among the counties that will get more money this year is Lamu which has a small population yet grew its revenue by more than Sh20 million.

Counties are supposed to generate revenue from property rates, parking fees, licences, rent, water and sewerage fees, entertainment taxes and service.

Nonetheless, effective revenue collection has been a challenge of most county governments. In the last financial year, locally collected revenue in counties fell by more than a 25 per cent.

Among the 23 counties that were rewarded for improving their collection in 2015, and which will now find their allocations significantly less are Kiambu, Kirinyaga, Tharaka Nithi and Laikipia, Narok and Trans Nzoia.

Kirinyaga will miss out on the funds since its local revenue reduced by Sh70 million.

In the financial year 2015/16, Kirinyaga managed to raise Sh390 million from local sources which was an improvement from Sh312 million collected in 2014/15.

For that improvement, the county was given Sh447 million as a reward for its fiscal efforts. However, despite setting a target of Sh743.24 million from local revenue sources in the next financial year, the county fell short by more than half by only managing to raise sh320 million.

Laikipia County will also miss the Sh386 million it received for its fiscal efforts in 2015/ 2016.

Governor Ndiritu Muriithi lamented over the issue earlier in the week. He said: “The penalty is severe and it is a major dent to our finances but locally we are making every effort to increase revenue collection.”

The total local revenue collected in the county fell by Sh9 million up from Sh471 million generated in the financial year 2015/16 to Sh462 million.

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