FILE PHOTO | NMG
Revenue collection by county governments dropped by Sh1.2
billion in the nine months to March compared to a similar period last
year, signalling potential borrowing by the devolved units to finance
some of their operations.
The 47 counties collected a
total of Sh24.7 billion between July 2016 and March this year compared
to Sh25.9 billion realised over a similar period a year earlier, data by
the Treasury shows.
“Collections so far have also
declined as a proportion of the annual target,” the Treasury said in its
latest budget outlook paper, adding that the revenue collected by
counties in the nine-month window is 41.4 per cent of the targeted
amount.
Only 20 counties posted a growth in revenue
collection compared to the previous year — underlining the massive
revenue generation and collection challenges facing the entities.
Nairobi
recorded the biggest drop in revenues by Sh900 million to Sh8.7
billion, accounting for three quarters of the total drop in county
revenues.
Nakuru’s internally generated revenue also
dipped by Sh400 million to Sh1.1 billion, according to the data by the
Treasury, while Uasin Gishu collected Sh18 million less at Sh524
million.
On the flipside, Mombasa grew its revenues to
Sh1.9 billion from Sh1.6 billion, while revenue receipts for Kisumu
remained unchanged at Sh776 million.
Bomet grew its
revenues 88 per cent to Sh197 million in the review period, Baringo by
10 per cent to Sh222 million while Bungoma’s receipts surged 61 per cent
to Sh526 million.
Boost revenue collection
The
Treasury said a newly drafted policy that seeks to incorporate the Kenya
Revenue Authority (KRA) in county revenue programmes would help improve
collections.
The policy was developed by an inter-agency committee drawn from county and national government teams.
“If
approved by the Cabinet and Parliament respectively, it is expected
that the policy and legislation will help to unlock counties’ revenue
potential,” the draft said.
According to the proposed
policy published this month, six of the 47 counties will be required by
law to contract KRA for revenue collection.
The six,
which are classified as devolved units with “relatively high revenue”
are Nairobi, Mombasa, Kiambu, Narok, Nakuru, Kisumu, Machakos and Nyeri.
“It
would be easier for KRA to collect revenue from more urbanised counties
with large formal sectors; this would allow KRA to fully apply its
professional skills, personnel and technical resources,” says Treasury
in a draft national policy to support enhancement of county revenue.
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