The Division of Revenue Bill, 2024
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
KSh 391.1 Billion Allocated for County Governments
Allocates an equitable share of KSh 391,116,788,147 to county governments for the 2024/25 financial year. This represents 24.90% of the FY 2020/21 audited and approved revenue (KSh 1,570,562,945,014), which exceeds the constitutional minimum threshold of 15%.
National Government to Absorb All Revenue Shortfalls
Under Clause 5(1), if the actual revenue raised nationally falls short of the projected estimates set out in the Schedule, the entire shortfall must be borne by the National Government. This mechanism safeguards county allocations from mid-year national revenue underperformance.
Excess Revenues Dedicated to National Debt Reduction
Under Clause 5(2), if actual national revenue collections exceed the projected targets, the surplus funds will accrue solely to the National Government. The Bill mandates that these excess funds may be used specifically to reduce borrowing or pay off existing debts.
KSh 7.85 Billion Set Aside for the Equalization Fund
Allocates KSh 7,852,814,725 to the Equalization Fund, representing 0.50% of the FY 2020/21 audited and approved national revenue, to fund development programs in marginalized areas.
Bill No.
No. 14 of 2024
Gazette No.
Supplement No. 57 of 2024
Sponsor
Ndindi Nyoro
Background
The Division of Revenue Bill, 2024 is introduced in accordance with Article 218 of the Constitution of Kenya and Section 191 of the Public Finance Management Act (Cap. 412A). The Act requires that the Bill be submitted to Parliament every year to divide nationally raised revenue equitably between the national and county levels of government, taking into account national interests, public debt obligations, and county administrative needs.
Key Allocations
The Bill establishes the sharing of a total of KSh 2,948,123,505,582 in sharable revenue for the 2024/25 financial year as follows:
- National Government: KSh 2,549,153,902,710
- County Equitable Share: KSh 391,116,788,147 (representing 24.90% of the FY 2020/21 audited and approved revenue of KSh 1,570,562,945,014)
- Equalization Fund: KSh 7,852,814,725 (representing 0.50% of the FY 2020/21 audited and approved revenue)
The county equitable share allocation of KSh 391.1 billion represents a KSh 16.6 billion increase from the adjusted baseline of KSh 374.5 billion allocated in FY 2023/24.
New Obligations and Mechanisms
Revenue Variation Adjustments
To guarantee stable funding for local governments, the Bill introduces the following operational rules:
- Shortfalls: If the actual revenue collected nationally falls short of expectations, the deficit must be absorbed entirely by the National Government.
- Excess Revenue: If actual revenue exceeds expectations, the surplus will accrue to the National Government and must be used to reduce borrowing or repay public debts.
Other National Allocations and Commitments
The explanatory memorandum details other key national obligations factored into the division criteria for FY 2024/25:
- Public Debt: KSh 1,352,610,000,000 (an increase from KSh 1,187,784,000,000 in FY 2023/24) to cover interest and redemption costs on domestic and external debt.
- National Interest Programs: KSh 106,830,000,000 for programs including security enhancement, national irrigation, youth empowerment, and the national social safety net.
- Other National Obligations: KSh 719,092,000,000 for pensions, constitutional salaries, Parliament, the Judiciary, and other statutory bodies.
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