The Division of Revenue Bill, 2023
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
Counties Allocated KSh 385.4 Billion in Revenue Sharing
County governments are allocated an equitable share of KSh 385,425,000,000 for the 2023/24 financial year. This represents an increase of KSh 15.425 billion from the FY 2022/23 allocation of KSh 370 billion. The allocation equates to 23.03% of the FY 2019/20 audited and approved revenue of KSh 1.673 trillion, which is well above the constitutional minimum of 15%.
National Government to Bear All Revenue Shortfalls
Under Clause 5 of the Bill, if the actual revenue raised nationally falls short of the projected targets, the entire financial deficit must be borne by the National Government. Conversely, any surplus revenue generated will accrue to the National Government to help reduce borrowing or pay off public debts.
KSh 8.37 Billion Allocated to the Equalization Fund
The Equalization Fund receives KSh 8,368,574,000, representing 0.5% of the FY 2019/20 audited and approved revenue of KSh 1.673 trillion. This fund is constitutionally designated to finance basic services—such as water, roads, health facilities, and electricity—in marginalized communities to bring them up to national standards.
Bill No.
No. 9 of 2023
Gazette No.
Supplement No. 32 of 2023
Sponsor
Ndindi Nyoro
Background
The Division of Revenue Bill is introduced annually in accordance with Article 218 of the Constitution of Kenya to facilitate the division of nationally raised revenue between the national and county levels of government. The allocations are guided by the criteria in Article 203(1) of the Constitution, which balances national interest, public debt obligations, the fiscal capacity of county governments, and developmental needs.
Key Provisions
The Bill establishes the sharing framework for KSh 2,571,159,000,000 (KSh 2.571 trillion) in ordinary revenue raised nationally for the 2023/24 financial year:
- National Government Allocation: KSh 2,177,365,426,000 (KSh 2.177 trillion).
- County Government Equitable Share: KSh 385,425,000,000 (KSh 385.425 billion), which is 23.03% of the FY 2019/20 audited and approved revenue of KSh 1,673,715 Million.
- Equalization Fund: KSh 8,368,574,000 (0.5% of the FY 2019/20 audited and approved revenue).
Revenue Variation Mechanisms
Clause 5 outlines how deviations in national revenue collection will be managed:
- Shortfalls: Any national revenue shortfall below the targets set in the Schedule will be borne entirely by the National Government.
- Surpluses: Any revenue collected above the projected targets will accrue to the National Government and must be directed toward reducing national borrowing or paying down public debt.
Transfer of Devolved Services
To support devolved library services, the county equitable share includes KSh 425 million as attendant resources for payroll relating to library services transferred from the Kenya National Library Services to county governments. This funding will be phased over a multi-year period, starting at 100% in FY 2023/24 and declining to 25% by FY 2025/26.
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