Ruto assents to Revenue Bill allocating Sh415 billion to counties for FY 2025/26
The Equalisation Fund has also been allocated Sh9.6 billion, bringing additional support to 34 marginalised counties.
President William Ruto has assented to the Division of Revenue Bill, officially paving the way for the distribution of Sh2.835 trillion in nationally raised revenue between the National and County Governments for the 2025/26 financial year.
With the presidential signature, counties will now receive Sh415 billion as their equitable share, an increase of Sh27.6 billion from the previous year.
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The Equalisation Fund has also been allocated Sh9.6 billion, bringing additional support to 34 marginalised counties.
The law, which was sponsored by Uasin Gishu MP and Liaison Committee Chairperson Gladys Boss, had undergone a full legislative process that included passage in both Houses, amendments by the Senate, rejection by the National Assembly, and final approval through a Mediation Committee.
The Bill was first introduced in the National Assembly on March 14 2025 and passed without amendments on April 9,2025.
When forwarded to the Senate, the House revised it on May 28 to update the revenue base from FY 2020/21 to FY 2021/22 and to raise county allocations from Sh405.1 billion to Sh465 billion. The National Assembly rejected these changes, leading to mediation.
On June 18, the Mediation Committee settled on a compromise version, proposing Sh415 billion for counties based on the FY 2021/22 revenue of Sh1.920 trillion, equivalent to 21.61, well above the constitutional minimum of 15 per cent.
This version was adopted by the National Assembly on June 19, 2025 and the Senate on June 30, 2025.
The law now allocates Sh2.332 trillion to the National Government, Sh415 billion to County Governments, and Sh9.6 billion to the Equalisation Fund. The overall revenue projection was revised to Sh2.756 trillion, reflecting economic conditions and past revenue performance.
The Sh415 billion allocation is aligned with the Fourth-generation revenue sharing formula, which required at least that amount to cushion 12 counties through an affirmative allocation of Sh4.46 billion shared equally.
These funds will support local development priorities in line with the Constitution.
Notably, the new law includes a safeguard under Clause 5 that protects county budgets from potential national revenue shortfalls. In such cases, the National Government will bear the deficit, ensuring uninterrupted county services and planning.
The Equalisation Fund, now fully included in the allocation, will support essential infrastructure projects in the 34 identified counties. The fund is directed at boosting access to roads, water, health, and energy in historically underdeveloped regions, in line with Article 204 of the Constitution.
With the presidential assent, the Bill is now law and becomes the foundation for financial operations at both levels of government in the new fiscal year. Counties are now expected to proceed with planning and budgeting, guided by the confirmed allocations.
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