Counties generate meagre income - CoB

Own-source revenue is still low because sources remain largely unexploited and because of pilferage

In Summary
  • Nyakang'o said counties should put up investments that will boost revenue collection.
  • She said there is a lot of pilferage in the counties because revenue collection systems are not water-tight.
Controller of Budget Margaret Nyakang'o
Controller of Budget Margaret Nyakang'o

Revenue collection is low in counties because sources of income are unexploited as poor staffing and pilferage diminish regional coffers.

Controller of Budget Margaret Nyakang'o has deplored the low revenues and counties' push for more money from the Treasury.

“There is a lot of pilferage in the counties because the systems are not watertight. Efforts are being made to improve the software. The National Treasury and Kenya Revenue Authority and my office are all working together to improve revenue collection in counties,” she said.

The Controller of Budget's report for the first nine months of 2019-20 targeted Sh58.8 billion but only Sh28 billion was collected, representing a performance of 48.5 per cent.

Nyakang'o said counties should put up investments that will boost revenue collection.

“We have seen the Kitui County Textile Centre, which is making uniforms and masks and generating a lot of income. We are hoping that other counties will also pick up in the same direction,” she urged.

Nyakang'o further said counties should find ways of improving their existing revenue sources.

 The Constitution allows counties to impose property rates, entertainment taxes, charges for services they provide and any other tax or licensing fee authorised by an Act of Parliament.

Nyakang'o added her office has seen some effort by counties to spend the money allocated to them.

On July 2, the CoB announced that counties were struggling to absorb money allocated for development.

The County Governments Budget Implementation Review Report revealed they spent Sh49.8 billion on development in first nine months of 2019-20, which is only 20.6 per cent of the expenditure.

Murang'a county reported the highest absorption rate of 60 per cent of its development budget as it spent Sh2 billion while Tana River reported 45.6 per cent and Marsabit 43.5 per cent.

Nairobi, Samburu and Nyandarua counties performed poorly, reporting 11.1 per cent, six  per cent, and 4.1 per cen,t respectively.

In Nyandarua, out of the Sh2.9 billion spent during the nine-month period, only Sh125 million went to development.

Governor Francis Kimemia said the report was misleading.

“We have absorbed 81 per cent of the money allocated and not 4.1 per cent. Our absorption target has been 95 per cent,” he said.

But speaking on Citizen TV on Wednesday, Nyakang'o said the report was based on information sourced from the counties.

“It came from Nyandarua county. It is possible that at the time of reporting, there were transactions still in the process. I will soon do another report and we will see how well Nyandarua has performed,” she said.

The Controller of Budget said fewer than 20 counties have approved budgets, another factor hindering absorption of funds. 

“It means no spending this month and even August. Because of such delays, you will find that very little will have been spent by the second quarter,” she explained.

She encouraged counties to approve timely budgets to improve absorption rates.

“Some counties sit there waiting for balances of previous years to be included, others have problems with MCAs while some have issues planning their projects,” she added.

She continued, “My office approves withdrawals. Applications for withdrawals should be within the law.”

Nyakang'o noted that her office has issued a circular outlining what they consider before approving expenditure.

“We are hoping that this year, things will be smooth if counties follow the guidelines,” she said.

(edited by o. owino)