, NAIROBI, Kenya, Nov 19 – In a bid to encourage counties to collect and declare more revenue, the Commission on Revenue Allocation has proposed a new formula where counties will be rewarded.
In the formula which commission chairman Micah Cheserem presented to the Senate Finance and Budget committee, counties that collect and declare the highest revenue will be given 2 percent of the fiscal responsibility kitty as a token.
The fiscal responsibility parameter is calculated from the county’s annual revenue increase per capita and will only be given to counties that have shown sound economic and budgetary practices which ensure citizens get value for their money.
“In using this parameter, the commission seeks to incentivize counties to maximize revenue collection and encourage fiscal prudence,” said Cheserem.
He said this was to reward effort and discourage revenue leakages which led to loss of millions of shillings.
This was also meant to ensure ‘rogue’ Governors and county staff who have been pocketing public money cease as counties who will not have increased their revenue collections will not get any monies from the fiscal responsibility kitty.
The previous formula allocated an equivalent of two percent of the shareable revenue to all counties to put in place systems that enhance revenue collection.
But committee members questioned why counties were being rewarded for doing their job with Senate Minority Leader Moses Wetangula (Bungoma) urging CRA to first develop a system of monitoring collections and ensuring counties declare their revenues as most were being lost to ‘greedy’ county officials.
Cheserem said they were working with counties to automate their systems to help curb leakage, explaining that there were notable improvements in those that had taken up the system.
“Kiambu, Nakuru, Kericho and Machakos are already automated and you can now see their local collections have shot up. We want to replicate this in all counties because we also realised many counties are only waiting for what we will give them from the national coffers,” Cheserem told the committee.
In the proposed formula the personnel emolument parameter which was meant to help counties with a high amount of staff adopted from the municipal councils was scrapped.
CRA instead proposed that these counties’ be allocated a conditional grant for the remunerating the staff.
The Senate committee is now expected to present the report to the House for adoption.
Senators had previously rejected another formula by the commission arguing that some of the proposals gave established counties an edge over least developed ones.