NAIROBI, Kenya, May 12 – The Division of Revenue Bill for the 2026/27 financial year is headed for mediation after senators approved fresh proposals requiring the national government to fully absorb any revenue shortfalls recorded during the period.
The new proposal, sponsored by the Senate Finance and Budget Committee, introduces a clause aimed at protecting county allocations from reductions in the event nationally collected revenues fall below projections.
Under the amendment, county governments would continue receiving their full equitable share allocation regardless of revenue performance, effectively shifting the burden of any deficit to the national government.
The committee has proposed an allocation framework that would grant counties Ksh454.74 billion as equitable share revenue, representing 22.2 percent of audited revenues from the 2022/23 financial year.
Meanwhile, the national government would retain Ksh2.437 trillion from the total sharable revenue of Ksh2.902 trillion, while the Equalisation Fund would receive Ksh10.25 billion under the proposed formula.
The Senate’s amendments are expected to trigger a mediation process with the National Assembly if the changes are rejected by MPs.
Article 113 of the Constitution and the Standing Orders of both Houses of Parliament provide for the establishment of a mediation committee when the National Assembly and the Senate fail to agree on a Bill.
In the case of the Division of Revenue Bill, mediation often arises due to disagreements between the bicameral Parliament over how much money should be allocated to counties versus the national government.
The mediation committee consists of equal numbers of members from both the Senate and the National Assembly. Its role is to negotiate and develop a compromise version of the Bill acceptable to both Houses.
Once agreed upon, the mediated version is taken back to both Houses for approval.
Neither House can amend the mediated text, with lawmakers only allowed to vote either to approve or reject it.
If both Houses approve the mediated version, the Bill is forwarded to the President for assent.
However, if the mediation committee fails to reach an agreement within 30 days, or if either House rejects the mediated version, the Bill is considered defeated.
The law, however, allows the Bill to be reintroduced in Parliament at a later date.
