President William Ruto has signed the Division of Revenue (Amendment) Bill, 2024, which will allocate Sh387 billion to counties as their equitable share for the 2024-25 financial year.
Originally, the Finance Bill, 2024 proposed an allocation of Sh400 billion to the devolved units; however, the rejection of the Bill necessitated a downward adjustment to Sh380 billion.
The purpose of the Bill was to amend the Division of Revenue Act, 2024, to adjust the distribution of nationally raised revenue between the National and county governments, reflecting the revised expectations for ordinary revenue collection for the 2024/25 financial year.
The Bill was approved by the National Assembly on August 7 and subsequently passed by the Senate with amendments on October 3.
On October 16, the National Assembly rejected the Senate’s amendments, leading to the establishment of a mediation committee to resolve the deadlock.
This 18-member committee, co-chaired by Kiharu MP Ndindi Nyoro and Mandera Senator Ali Roba, reached an agreement on Tuesday that added Sh7 billion to the counties’ allocation.
In reaching this agreement, the committee considered various factors, including the rationale behind the Sh5 billion reduction in county allocations from the previous year and the projected revenue shortfall of Sh346 billion.
The committee also reviewed the criteria used for revenue projections and discussed the final funding amounts for counties.
Additionally, they analyzed historical revenue collection data from the national government over the past decade, as well as county performance in generating local revenue.
The increased allocation to the counties now constitutes 24.67 percent of the latest audited revenue, significantly exceeding the constitutional minimum requirement of 15 percent.
The Act also designates Sh2.2 trillion for the National Government.
Attending the event at State House were Deputy President Kithure Kindiki, National Assembly Speaker Moses Wetang’ula, and Senate Speaker Amason Kingi.
Also present were Prime Cabinet Secretary Musalia Mudavadi, Treasury Cabinet Secretary John Mbadi, along with various leaders from both Houses.
Additionally, President Ruto signed the Rating Bill 2022 and the Water (Amendment) Bill, 2024.
The Rating Act, 2024, establishes a standardized framework for property valuation and rating, providing counties with explicit guidelines for assessing property values and levying rates, among other provisions.
Conversely, the Water (Amendment) Act, 2024, facilitates Public-Private Partnerships to support the financing of water infrastructure development by National Government Agencies.
