Division of Revenue Bill, 2024
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
KSh 2.95 Trillion National Revenue Split Decided
The bill divides KSh 2,948,123,505,582 in total sharable revenue, allocating KSh 2,549,139,627,435 to the National Government, KSh 391,116,788,147 as the county equitable share, and KSh 7,867,090,000 (0.5%) to the Equalization Fund.
National Government Must Bear All Revenue Shortfalls
Under Clause 5(1), if the actual revenue collected nationally falls short of expectations, the entire shortfall will be absorbed by the National Government, ensuring county allocations remain fully funded.
Excess Revenues Dedicated to Debt Reduction
According to Clause 5(2), any actual revenue raised that exceeds the projected targets will accrue exclusively to the National Government and may be used to reduce borrowing or pay down public debts.
Road Maintenance Fuel Levy Netting Restructures County Allocations
The county baseline was adjusted from KSh 385.4 billion down to KSh 374.5 billion by netting off KSh 10.9 billion for the Road Maintenance Fuel Levy (RMFL), which will now be transferred as conditional allocations in FY 2024/25.
Bill No.
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Gazette No.
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Sponsor
Njuguna Ndung'u
Background
The Division of Revenue Bill, 2024 is prepared in accordance with Article 218(2) of the Constitution of Kenya and Section 191(5) of the Public Finance Management Act, 2012. Its primary objective is to establish the equitable division of nationally raised revenue between the National and County Governments for the financial year 2024/25. This division is vital to facilitate the smooth functioning of county governments and ensure uninterrupted public service delivery.
Key Allocations
The bill prescribes the following vertical division of revenue raised nationally for the FY 2024/25:
- Total Sharable Revenue: KSh 2,948,123,505,582
- National Government: KSh 2,549,139,627,435
- County Equitable Share: KSh 391,116,788,147
- Equalization Fund: KSh 7,867,090,000 (representing 0.5% of the FY 2019/20 audited and approved revenue of KSh 1,573,418,000,000)
The county equitable share allocation of KSh 391.1 billion represents an increase of KSh 16.6 billion over the adjusted FY 2023/24 baseline of KSh 374.5 billion. The baseline was adjusted from KSh 385.4 billion by netting off KSh 10.9 billion related to the Road Maintenance Fuel Levy (RMFL), which has been restructured to be transferred as conditional allocations starting in FY 2024/25.
New Obligations
- Shortfall Absorption: If the actual revenue collected falls below the projected KSh 2.95 trillion, the entire financial deficit must be borne exclusively by the National Government (Clause 5(1)).
- Debt Mitigation from Excess Revenue: Any actual revenue raised exceeding the projected targets will go to the National Government, but must be prioritized to pay off debts or minimize borrowing (Clause 5(2)).
- Local Emergency Reserves: Under the Public Finance Management Act, 2012, county governments are expected to establish County Emergency Funds, setting aside at least 2% of their budget allocations for unexpected disasters and crises.
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