Formula dispute a wake-up call to counties on own revenue collection

What you need to know:

  • Kenyans need peace and development and it’s the leaders’ duty to create a forum on how to build our country, not necessarily based on wealth or even philanthropy.

Counties will soon finally know the funding they will receive from the national government out of the available Sh316 billion in Financial Year 2020-2021.

In contention is how the proposed sharing formula creates losers of huge revenue sources and how it benefits the traditionally well-off regions.

However, I find this panic mode of counties baffling. This is our seventh year since the onset of devolution in 2013. By now, counties should have been so well managed that they no longer see the national government allocation as a big deal. After all, we have been on a pandemic and our revenue sources have taken a hit as a result.

We’ve seen leaders from all political persuasions calling for their regions to be treated in a way that makes them not lose what they have been accustomed to receiving from the national coffers. But what the stalemate on the proposed formula should teach us is that we need ingenuous ways of growing counties’ own sources of revenue and using them for effective and increased service delivery.

Counties are supposed to supplement what they get from the national government with their own sources of revenue. However, they have underperformed on this front. They have been collecting, on average, 63.7 per cent of targeted revenues for the past six years.

But counties have experienced poor revenue mobilisation and leakages of what is collected and use of outdated property valuation rolls, where, for example, Nairobi last updated its valuation roll in 1982!

There is lack of comprehensive databases of businesses and properties to tax, according to the “Development Initiatives 2018” report. Counties must leverage on business permits, parking fees, land rates and rent fees, cess and administrative fees from hospitals and other services.

They must also improve the business environment and allow for the formation of businesses on which to levy taxes. They must also improve infrastructure to give traders incentives to pay their taxes and rates promptly.

A Lagos State governor used public private partnerships (PPPs) to develop massive infrastructure, creating an enabling business environment that saw Nigerians compete in paying their taxes and rates. It also reduced over-reliance on government financing.

Daniel Mutegi Giti, Nairobi


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Kenyans need peace and development and it’s the leaders’ duty to create a forum on how to build our country, not necessarily based on wealth or even philanthropy.

Meru Senator Mithika Linturi initiated a formula of distributing funds to counties based on poverty, health and agriculture figures. After seven years of devolution, it would be important to factor fiscal efforts if Linturi’s idea is to be implemented.

LILLIAN OWAGA, Kisumu