Only five counties met their revenue targets in the year to June 2021, leading to an under-collection of Sh19 billion of internally generated funds.
Treasury data submitted to Parliament shows that the 47 county governments collected Sh34.4 billion against the target of Sh53.7 billion.
Ukur Yatani, the Treasury Cabinet Secretary, said the collection represented 64.1 percent of own-source revenue (OSR) target of Sh53.7 billion in the financial year 2020/21.
“Only five county governments were able to collect more than one hundred percent of the annual OSR in the financial year 2020/21,” Mr Yatani said in the 2022 Pre-Election Economic Fiscal Report tabled in Parliament ahead of indefinite adjournment (sine die) to pave way for August 9, General Election.
Mr Yatani did not disclose the five counties which surpassed their revenue targets.
The Treasury estimates that counties can cumulatively raise Sh173 billion annually if revenue leakages can be sealed.
The Treasury statistics show that over Sh2.4 trillion has been disbursed to counties since the advent of devolution eight years inform of equitable share from revenue raised nationally, conditional allocations from the national government share or revenue as well as from proceeds of loans and grants from development partners
Mr Yatani said counties were allocated Sh370 billion in the financial year under review from revenue collected by the national government.
The Constitution requires that 15 percent of the total audited revenue raised nationally will be shared among the 47 counties.
The Constitution empowers a county to impose property rates, entertainment taxes and any other tax that it is authorised to impose by an Act of Parliament.
“The National Treasury in collaboration with the ministry of Lands developed the National Rating Bill, 2022 to replace the outdated Valuation for Rating Act (Cap 266) and Rating Act (Cap 267),” Mr Yatani said.
He said the bill which was submitted to Parliament in January and is expected to guide valuation for rating and imposition of rates on ratable property in county governments.
Mr Yatani said three viable options for a single integrated revenue management system for counties have been identified.
“The approval of a viable Integrated County Revenue Management System (ICRMS) by MAT will pave way for piloting and rollout of the revenue system to the county governments,” he said.