Senators have called on counties to significantly increase their own-source revenue (OSR) collections as a strategy to ease the burden of mounting wage bills and ensure sustainable development at the local level. This push comes in the wake of the Senate Committee on Information, Communications, and Technology (ICT) identifying critical gaps in revenue collection systems across counties.
The committee, led by Trans Nzoia Senator Allan Chesang, has noted that many counties are underperforming in their revenue collection efforts due to outdated or inefficient systems. The committee’s members argue that without effective and digitized systems in place, counties are leaving money on the table, which could otherwise be used to address pressing challenges, including the wage bill crisis.
Speaking at a recent courtesy call on Uasin Gishu Governor Jonathan Bii in Eldoret, Senator Chesang emphasized the importance of ensuring that counties have the necessary tools to optimize their internal revenue streams. The committee members are on a tour of counties to assess their current revenue collection capacity and to offer solutions aimed at plugging the gaps that result in revenue losses.
The issue of underperformance in revenue collection was highlighted by Nandi Senator Samson Cherargei, who pointed out that while counties like Uasin Gishu have the potential to collect over Sh2 billion annually, they were currently falling short. For example, Uasin Gishu, despite its substantial revenue potential, only managed to collect Sh1.4 billion in the last financial year.
Cherargei attributed the underperformance to the lack of an integrated revenue management system, which has long been recommended by the Kenya Revenue Authority (KRA). He stressed that an Integrated County Revenue Management System (ICRMS) would help to eliminate the loopholes through which counties lose significant revenue. Such a system would also help counties improve their financial independence, reducing their reliance on the equitable share of revenue from the national government.
The call for digitization of revenue collection was echoed by Senator William Chesang, who expressed concern over the persistence of manual revenue collection methods in some counties. He warned that the continued use of outdated methods was contributing to massive financial leakages, preventing counties from collecting the full amount of revenue they are due. According to Chesang, counties must embrace modern, integrated systems to stem these losses and maximize their revenue generation.
In his remarks, Senator Chesang also pointed out that improving revenue collection would not only help counties cover their wage bills but would also enable them to finance other key development projects without depending heavily on national government transfers. The focus on self-sufficiency in revenue collection, he explained, would empower counties to make more autonomous decisions regarding their budgets, fostering sustainable growth at the local level.
The Senators’ tour has already taken them to various counties, with plans to visit Elgeyo Marakwet and Trans Nzoia next. During these visits, the committee is engaging local officials to identify the specific challenges faced by each county in managing their revenue streams and offering recommendations for improvement.
The senators are also encouraging counties to tap into funds held in the County Revenue Fund (CRF) at the Central Bank of Kenya. These funds, which are sometimes not utilized, could be an additional resource to help counties bridge their funding gaps, particularly in meeting the growing wage bills.
Senator Cherargei has reiterated the importance of counties doing everything possible to collect as much revenue as possible, stressing that ensuring the wage bill remains manageable at or below the recommended 35% of total revenue requires a concerted effort from all stakeholders. He commended Uasin Gishu for its progress in revenue collection, underscoring the importance of adopting best practices that could be replicated in other counties.
The push for better revenue collection systems is a critical part of broader reforms aimed at improving fiscal management at the county level. By ensuring that counties are more financially independent, the government hopes to reduce the dependency on national government transfers, improve service delivery, and ultimately contribute to the achievement of devolution’s objectives.
The Senate Committee on ICT’s ongoing oversight role in ensuring counties adopt more efficient and transparent revenue collection systems will be crucial in addressing the challenges of devolution and ensuring that local governments can meet their financial obligations without compromising service delivery.
