County Governments’ Revenues

With the new Kenyan county government system being effective after the general elections which jForeignust ended; focus now shifts to the budgets for the financial year 2013/2014 which must incorporate the county government system. Of concern here is the source of revenues for the county governments to run their activities.

The first source of revenue for county governments as provided for in the constitution is the national government. Chapter 12 of the Kenyan constitution, article 202 (1) states that, “Revenue raised nationally shall be shared equitably among the national and county governments.” Article 202 (2) further states that, “County governments may be given additional allocations from the national government share of revenue, either conditionally or unconditionally.”

Taxes imposed at the county level are another source of funds for the county governments. Article 209 (3) of the Kenyan
constitution states that;
“A county may impose:
(a)Property rates;
(b)Entertainment taxes; and
(c)Any other tax that it is authorized to impose by an Act of Parliament.”

“The national and county governments may impose charges for the services they provide.” – Article 209 (4) of the constitution. This therefore means that not all services provided by either the national or county government shall be free. The charges imposed on the benefit enjoyed from such services will also form part of the revenue for the county and national governments depending on the government imposing the charges.

“The taxation and revenue-raising powers of a county shall not be exercised in a way that prejudices national economic policies, economic activities across county boundaries or the national mobility of goods, services, capital or labour.” – Article 209 “5” of the constitution. The overall national economic development should therefore be the guiding principle even as the county governments look for ways of raising revenues to promote development at the county level.

Finally, “There shall be established a Revenue Fund for each county government, into which shall be paid all money raised or received by or on behalf of the county government, except money reasonably excluded by an Act of Parliament.” – Article 207 (1) of the constitution.

2 thoughts on “County Governments’ Revenues

  1. The main source of revenue for the county governments is the budget allocation from the national government. In the financial year 2014/2015 the allocation is set at Kshs 226.7 Billion which is about 13% of the total national budget. However, as indicated in the article above, the county governments can also raise revenue through taxes such as property rates and entertainment taxes. The county governments can also issue bonds to raise additional revenue as well as charging some fees on the public services they offer to the citizens.

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