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Counties challenged to grow alternative revenue streams

Written by MyGov

Key officials in charge of county revenue pose for a group photo with Dr James McFie (right) at the Strathmore Business School where they underwent training.

The Commission for Revenue Allocation (CRA) and the Office of the Controller of Budget (OCB) have challenged county governments to adopt income enhancement training for staff to grow revenue streams.

Those targeted include key revenue officials and Members of County Assemblies (MCAs) who are serving in respective Finance and Budget Committees.

The training is intended to aid devolved units identify and implement relevant revenue laws aimed at improving own revenue sources. Revenue collected by all the 47 counties contributed only 8.1 per cent of total county budgets.

CRA’s Legal Director Sheila Yieke said counties were grossly underperforming in revenue collection due to lack of legal and administrative framework. “Because counties have now already identified the sources of own revenue with the most potential, they now need to urgently enhance revenue from these sources,” said Ms Yieke.

She was speaking at Strathmore University during the Specialised Revenue Enhancement Workshop.

Deputy Director at the Office of the Controller of Budget Mr Stephen Masha said counties had continuously missed targets in revenue collection due to weak enforcement resulting from lack of skilled workforce and an absence of up to date database of respective tax bases.

According to CRA and OCB, training on revenue enhancement would lead to formulation of laws that maximise revenue from high potential sources while providing the legal tools to enforce revenue collection. “At CRA, we have taken effort to develop model revenue laws that county assemblies can adopt and modify to enhance their revenues. These are already available on our websites,” she observed during the workshop.

Kisii MCA Dennis Ombachi, who chairs the County Budget Committee, rooted for initiatives that would speed up the achievement of self-sufficiency. “Counties continue to improve budget contribution ratio of own revenue to allocation from national government every year. It is a journey we should accelerate by tapping the unique revenue opportunities available to each county,” he said.

According to the Controller of Budget, counties collected only 69.3 per cent of the set targets of their own revenue during the 2015/16 financial year. This was in spite of the many charges levied by the counties.

While total revenue generated from counties has been growing, it still contributes less than a tenth of county budgets. “Presently, no county can sustain their own budgets without the remittance from the national government allocation,” said Masha.

Counties in Kenya raised KSh25.7 billion in Financial Year (FY) 2013/14, Ksh32 billion in 2014/15 and Ksh35 billion FY 2015/16. Representatives from Strathmore University said radical efforts around revenue enhancement would help counties achieve sustainability.

Questions on sustainability of counties have continued to be posed by a section of economists and some proponents of abolishment of the devolved governments system.  “Training key county revenue officials around revenue enhancement will grow capacity to support the emergence of the first self-sufficient county in Kenya,” said Strathmore’s Tirus Wanyoike.

Governors are presently meeting in Naivasha for the annual devolution conference.

 

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