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Governors on the spot for failing to meet revenue targets

Council of Governors (CoG) chairperson Anne Waiguru during a press conference in Nairobi on November 22, 2023. (Photo: Council of Governors)

By Apollo Ochieng | Monday, February 5, 2024

Due to a lack of proper legislation and equipment, the 47 county governments have been unable to meet their targets, leading to delayed or even poor service delivery in the regions.

Governors have once again been put on the spot for failing to enact laws and invest in technology to boost revenue collection in counties.

The Commission on Revenue Allocation (CRA), in a new report on the status of revenue collection in counties, says delays in passing laws to safeguard collection as well as investment in both technology and human capital are denying counties billions of shillings in revenue each year.

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The commission says the devolved units currently have the potential to raise at least Sh215.6 billion against the Sh28.77 billion raised in the first nine months of the 2022/23 financial year.

However, due to a lack of proper legislation and equipment, the 47 county governments have been unable to meet their targets, leading to delayed or even poor service delivery in the regions.

"Article 209 (3) empowers county governments to generate revenue from their own sources. However, a number of challenges including inadequate legislation and weak technological and human capacity for revenue collection have hindered the devolved units from achieving optimal revenue collection," the CRA said in the report published on Monday.

The commission also noted that while key revenue streams like public health services, business permits, cess, advertising and parking drove earnings for most counties, there remained many unexplored areas. These include revenue in areas such as market fees, property rent, and land rates.

"The CRA is, however, building counties' capacity to collect optimum OSR [own-source revenue] to be more self-sustaining," the report noted.

The report is part of the cost of OSR collection study done by the CRA in five pilot counties, on how devolved units can best build their capacities to improve revenue generation within their jurisdictions.

"The CRA study is driven by the need to solve one of the pressing challenges in revenue administration and management, identified in the National Policy to Support Enhancement of County Own Source Revenue as weak understanding of county revenue administration costs," it says.

"The cost of revenue administration at the county level is not well understood and research data is lacking. This makes it difficult for counties to collect fees and charges efficiently."