President William Ruto has assented to the Division of Revenue Bill, 2026, paving the way for county governments to receive Sh428 billion as their equitable share of nationally raised revenue in the 2026-27 financial year.
The signing of the Bill at State House, Nairobi, concludes months of legislative consideration and mediation between the National Assembly and the Senate over the amount to be allocated to counties.
The Bill, formally known as the Division of Revenue Bill (National Assembly Bill No 2 of 2026), provides for the sharing of nationally raised revenue between the national and county governments in line with Articles 202, 203 and 218 of the constitution.
In addition to the equitable share allocated to counties, the law sets aside Sh10.25 billion for the Equalisation Fund, representing 0.5 per cent of the most recent audited revenue approved by the National Assembly.
The allocations are based on audited national revenue of Sh2.05 trillion.
The Sh428 billion allocation to counties represents 21 per cent of the audited revenue, exceeding the constitutional minimum requirement of 15 per cent provided under Article 203(2) of the constitution.
The county allocation is also an increase of Sh13 billion from the 2025-26 financial year.
According to Parliament, the additional funds are intended to support county governments in delivering devolved functions and improving service delivery across the country.
"It is anticipated that the enhanced allocation shall enable county governments to plan, budget and spend in key priority areas and facilitate the equitable provision of services to all citizens," the brief accompanying the Bill stated.
The Bill was first introduced in the National Assembly on February 19, 2026 by Budget and Appropriations Committee chairperson Samuel Atandi.
The National Assembly passed it with amendments on March 10 before forwarding it to the Senate, which also approved it with changes on May 12.
Differences between the two Houses centred on the amount of equitable share to be allocated to counties, necessitating a mediation process.
The mediation committee reached an agreement on June 9, with both the National Assembly and the Senate subsequently approving the final version on June 10.
The enactment of the law comes against the backdrop of increased pressure on public finances, particularly rising expenditure under the Consolidated Fund Services, which includes debt servicing and other mandatory payments.
Parliament said the allocations were designed to ensure fiscal sustainability while balancing the financing needs of both levels of government.
The assent of the Division of Revenue Bill also clears the way for consideration and passage of the Appropriations Bill, 2026 and the County Allocation of Revenue Bill, 2026, key laws required to operationalise the 2026-27 budget.
County governments are expected to use the additional funding to strengthen service delivery in sectors such as health, agriculture, early childhood education and local infrastructure, which fall under their devolved functions.
