27 February 2013

Kenya: CRA Wants County Cash Raised From 15 Percent to 34 Percent

THE Commission on Revenue Allocation wants the allocation to counties raised from the 15 per cent of national revenues guaranteed in the constitution to 34 per cent next financial year.

The commission believes the amount, which translates to Sh231 billion based on last financial year collection, is the most comfortable for the 47 counties to function properly.

CRA, whose main mandate is to recommend the basis for equitable sharing of national revenues between the national and the county governments, said that Sh9.8 billion will be released to the county governments next week after the March 4 elections for running costs and salaries. This amount is expected to sustain the counties between March and June when the new budget will be presented.

If the 15 per cent sharing rule was followed, the counties would have received Sh91.5 billion out of the Sh610 billion that was raised in the financial year 2011/2012.

However the commission wanted this figure computed at a rate of 33 per cent of the total revenues which means counties would have received Sh201.3 billion. This figure would then rise to Sh231 billion, or 34 per cent, in the financial year 2013/14.

CRA director for county fiscal affairs Stephen Masha however clarified that the 34 per cent is just a proposal which may be taken or not. Masha argued that the constitution only places a minimum of 15 per cent but not a maximum. Masha was speaking in a county governance forum organised by the Institute of Certified Public Secretaries of Kenya.

According to CRA, out of the Sh9.8 billion that will be released next week, Nairobi will get the highest allocation at Sh489 million while Lamu will get the least at Sh77 million. The allocations are based on five criteria namely population, poverty index, land area, basic equal share and fiscal responsibility of each county.

But once the county governments are in place, the constitution allows them to raise their own revenues from taxes such as entertainment, property taxes, local authority taxes among others.

They are also allowed to borrow money from oversees sources but with the approval of the national government. CRA said a loans and grants council will be formed to vet all the loan application by counties.Masha said county budget coordinators have already been recruited to ensure proper use of funds allocated to the counties.

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