Should the plenary approve the
report of the Public Accounts Committee, the new revenue sharing basis
would be Sh1.92 trillion, a few millions shy of Sh2 trillion.
The basis was
arrived at after review of audit reports
for ministries and state departments.
The basis has increased by about
Sh350 billion when compared
with the audited revenue of the
previous review for the financial
year 2020-21, which was set at
Sh1,570,562,945,014.
“The committee recommends that
the total nationally collected revenue
of Sh1,920,434,085,078 forms the
basis of sharing revenue between the
national and county governments as
contemplated in Article 203 of the
Constitution,” PAC said in a report
tabled in the National Assembly.
During the financial year ending
June 30, 2022, the government collected Sh2.03 trillion, which was
Sh314 billion or 18 per cent higher
than the previous fiscal period.
This means counties’ share of revenue would start from Sh290 billion
– calculated at the rate of 15 per cent
set in the constitution County allocations have increased
over time.
The current Division of
Revenue Bill (2025) sets aside Sh405
billion for the 47 counties, translating
to about 26 per cent.
At the same rate, and with the new
revenue base, MPs on the Public Accounts Committee have tipped counties for a raise, pushing their equitable
share to about Sh500 billion.
For many years, counties suffered
from low funding because MPs
delayed the approval of audited
accounts, a situation the National
Assembly has been keen to reverse since 2019.
The National Treasury
is also accused of failing to disburse
equitable shares on time for implementation of budgets.
The Auditor General recently released audited books for the year
ending June 2024, meaning MPs are
lagging behind by two financial years.
At the same time, counties arguably
are not collecting enough internal revenue to meet budget shortfalls at time
of funding constraints.
In the financial year 2024-25,
counties got Sh387 billion as the equitable share, which resulted from
mediation between the National Assembly and the Senate.
The political class has been grappling with difficulties in amending
the threshold set in the constitution
to give counties more money.
A push to increase the base to 25
per cent failed after the Building
Bridges Initiative was thrown out
by the courts, which ruled it unconstitutional and cited lack of public
participation.
A recent push by the National
Dialogue Committee to increase the
share to 20 per cent is also yet to be
realised as players delay implementing the report.
The joint Justice and Legal Affairs
Committee of the Senate and National Assembly has supported the Nadco
proposal
