By: JOHN NGIRACHU
Counties that increase their tax collection should get more money from the national government, it has been proposed.
The Commission on Revenue Allocation made the proposal when it met the Senate’s Finance Committee.
This would reward hard working counties and reduce dependence on the national Treasury.
“Some counties were relying more on funding from Nairobi. Counties should be encouraged to collect more, not rely on the share from Nairobi,” commission Chairman Micah Cheserem told the Senate’s finance, commerce and budget committee.
He said counties such as Kiambu, Kericho, Nakuru and Machakos had improved their revenue collection because of automation and they would be rewarded, if the formula was adopted by the Senate.
Prof Joseph Kimura, a member of the revenue allocation commission, said academic research and pragmatic factors had been considered in drawing up the new formula.
“We have tried to borrow from other countries that have devolution. We have also visited every county and have knowledge of the issues on the ground,” he told the committee chaired by Mandera Senator Billow Kerrow.
But Senate Minority Leader Moses Wetang’ula objected to the emphasis on “rewarding” county governments for collecting taxes. He said this was their job.
Mr Wetang’ula said that in Bungoma, the government had projected to raise Sh1.5 billion but only managed Sh183 million in 2013/2014 and then Sh505 million in 2014/2015.
While this was an increase of Sh322 million, he argued that the county has still not met the Sh1.5 billion target.
“That should only work if the county surpasses the target. I don’t see the point in rewarding someone for doing what they are supposed to do,” he said.
Mr Kerrow argued that it must be worked out so that counties that put in extra effort in collecting revenue have their share increased.
Using that formula, the highest increases in allocations would go to Mombasa (Sh549 million), Kiambu (Sh354 million), Kajiado (Sh321 million), Nairobi (Sh312 million) and Embu (Sh299 million).
On the other end of the scale, Busia, Mandera, Samburu, Turkana and Vihiga would not get any increase as their collections declined.
This is the second proposed formula for the sharing of revenue starting in the 2016/2017 financial year.
An earlier proposal was shot down by the Senate.
Mr Wetang’ula said: “What is happening in many counties is that locally collected revenue is neither here nor there. The truth is that the money is being collected and shared among corrupt county government officials.”
SOURCE: DAILY NATION