MPs, senators strike deal, agree on Sh415 billion revenue allocation to counties
During a sitting on Monday, June 16, Mandera Senator Ali Roba had proposed a compromise figure of Sh435 billion, highlighting the importance of matching funding with responsibilities.
Counties will receive Sh415 billion in equitable share for the 2025/26 financial year after Members of Parliament and senators reached a consensus, ending a long standoff that had threatened to stall the budget process.
The agreed Sh415 billion allocation marks a Sh27.6 billion increase from the Sh387.4 billion disbursed in the 2024/25 financial year. It is also Sh10 billion more than the National Treasury’s initial proposal of Sh405.1 billion, marking a 4.8 per cent growth.
More To Read
- Revenue shortfall sparks National Treasury’s Sh18 billion supplementary budget push
- National Assembly passes Finance Bill 2025, targets Sh24 billion in new revenue
- MPs say no to cheap steel imports, back local industries
- MPs reject Treasury's plan to scrap VAT relief on mobile phones, solar, animal feeds
- State House, NIS among beneficiaries of Sh9.3 billion emergency funds
- How Gen-Z protests forced National Treasury to cut Sh52 billion from budget
The breakthrough was reached on Wednesday, after the mediation committee handling the Division of Revenue Bill announced that legislators from both Houses had settled on the final allocation to county governments.
“This agreement is a crucial step in finalising the national budget and ensuring fair and equitable distribution of resources for the upcoming financial year,” the committee said in a statement.
The resolution followed extensive talks during the committee’s fourth meeting, which included engagements with representatives from the National Assembly and the Senate.
The latest figure, Sh415 billion, emerged as a compromise between sharply divergent proposals. The National Assembly had backed the National Treasury’s proposal of Sh405.1 billion, citing prevailing economic difficulties and limited revenue projections in the Finance Bill 2025.
In contrast, the Senate had advocated for a Sh465 billion allocation, arguing that county governments needed adequate funding, especially after receiving additional devolved functions.
During a sitting on Monday, June 16, Mandera Senator Ali Roba had proposed a compromise figure of Sh435 billion, highlighting the importance of matching funding with responsibilities.
“All additional functions transferred from the national government to county governments should be accompanied by the necessary funding to ensure that counties are adequately resourced,” he said.
However, Budget Committee Chairperson and Alego Usonga MP Samuel Atandi opposed the Sh435 billion proposal, insisting the country’s fiscal space could not support it.
“It would be hard to allocate Sh435 billion to counties given the current financial constraints experienced in the economy,” Atandi said.
“Since the Finance Bill 2025 is not generating much revenue for the country, it would be catastrophic to allocate more money to counties, which we do not currently have.”
The difference between the initial proposals from the two Houses stood at nearly Sh60 billion, threatening to delay the approval of the national budget.
With the mediation process concluded, the harmonised version of the Division of Revenue Bill, 2025, will now be tabled in both the Senate and the National Assembly for debate and passage.
The National Assembly is scheduled to introduce the bill on the floor later today.
Top Stories Today
