The government is enhancing revenue management systems and mapping guidelines that will improve counties’ Own Source Revenue (OSR) while minimizing leakages.
Devolution Principal Secretary Michael Loikenu Lenasalon has said the State Department is collaborating with the Commission on Revenue Allocation (CRA) in enhancing OSR systems and strategies and developing guidelines that will ensure no one interacts with the cash collection from the levies and licensing fees, thus reducing leakages. While improving on revenue collection in counties.
Lenasalon added that adoption of technology through automation is also one of the most effective ways for counties to increase revenue collection, which in turn will improve national revenue because of the increase of tax payers from the counties.
The PS pointed out that for counties to realize their development agenda, as envisioned in Vision 2030 in the Bottom-Up Economic Transformative Agenda (BETA), both the National and County government must increase their revenue collection to enable them to undertake more development projects, improve on service delivery and reduce borrowing.
Lenasalon spoke during a one-week stakeholder validation of the county government’s OSR Mapping guidelines at a Machakos hotel, where he commended the CRA on their adoption and approval of draft mapping guidelines for the 47 counties.
“OSR not only increases county revenue but, most importantly, it improves the physical autonomy of county governments and allows them to better manage their finances,” he said.
The PS decried that counties’ OSR is below the expected potential and estimated target, resulting in reduced resources to fund county service delivery, thus resulting in pending bills and poor service delivery in the counties.
The PS urged the Revenue Commission to hasten the remaining steps in validating the mapping guidelines and ensure it is finalized and shared with the counties for implementation.
The chairperson, CRA Mary Wanyonyi Chebukati, reiterated that counties are underperforming, leading to pending bills.
She added that according to a study done by CRA in 2022, counties have a collective potential to collect Sh216 billion in revenue, but they are currently collecting Sh59 billion, thus running on a shortfall of Sh157 billion.
She noted that if the counties managed to achieve their potential and collect the Sh216 billion in addition to the equitable share they receive from the National Treasury, which is Sh387 billion, then counties will have Sh603 billion for effective service delivery.
However, Chebukati singled out Machakos and Mombasa counties as the only ones that have successfully mapped their revenue, where she emphasized that mapping revenues helps counties identify different revenue streams and which one gives more revenue compared to others.
“We are here to ensure we approve guidelines that will assist counties in mapping their revenue, and once we validate these guidelines, they will be able to assist in ensuring OSR is available and well collected for counties,” said Chebukati.
Consequently, the Chairperson identified lack of resources as one of the main challenges facing counties in mapping their revenue and encouraged them to first set their targets right and work towards achieving their collection potential to avoid pending bills.
She acknowledged support received from various stakeholders present during the validation of mapping guidelines, such as office of the Controller of Budget, The National Treasury, the State Department for Devolution and the council of governors.
By Anne Kangero
