Division of Revenue Bill 2024

NATIONAL TREASURY AND ECONOMIC PLANNING

Division of Revenue BilI, 2024

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• l-Short title.
• 2-Interpretation.
• 3-Object and purpose of the Act.
• 4-Allocations to National Government and County Governments.
• 5-Variation in Revenue.

SCHEDULE

Equitable Share of Revenue Raised Nationally between the National and County Govemments for the Financial Year 2024125

APPENDIX

Explanatory Memorandum to The Division of Revenue 8111,2024

ST,GBTT

DMSION OF REVENUE BrLL,2024 ARRANGEMENT OF CLAUSES

A Bill for

AN ACT of Parliament to provide for the equitable division of revenue raised nationally between the national and county governments in linancial year 2024125, and for connected purposes.

ENACTED by Parliament of Kenya, as follows-

| Short title | l. This Act may be cited as the Division of Revenue Ac1,2024 | |-----------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | InterpretatiqrI | 2. In this Act, unless the context otherwise requires- | | | "Cabinet Secretary" means the Cabinet Secretary for the time being responsible for matters relating to finance; and | | No. l6 of20l I | "revenue" has the meaning assigned to it under section 2 of the Commission on Revenue Allocation Act, 201 l. | | Objcct and purpose of the Act. | 3. The object and purpose of this Act is to provide for the equitable sharing of revenue raised nationally between the national and county governments for the financial year 2024125 in accordance with Article 203 (2) of the Constitution | | Allocations to National Government and county govCmments. | 4. Revenue raised nationally in respect of the financial year 2024125 shall be shared equitably among the national and county goverffnents as set out in the Schedule to this Act. | | Variation in revenue | 5. (1) Ifthe actual revenue raised nationally in the financial year falls short of the expected revenue set out in the Schedule, the shortfall shall be borne by the National Government. | | Variation in revenue | (2) If the actual revenue raised nationally in the financial year exceeds the projected revenues set out in the Schedule, the excess revenue shall accrue to the National Govemment, and may be used to reduce borrowing or pay debts. |

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Division of Revenue Bill, 2024

SCHEDULE (s.4)

Allocation of Revenue Raised Nationally Between the National Governnrent and County Governments for the Financial Year 2024125.

| Type/level of allocation | Type/level of allocation | Amount in Ksh. | Percentage (oh) ot 20 19 I 20 audited and approved Revenue i,e. Ksh.1,573,418 Million | |----------------------------|----------------------------|--------------------|-----------------------------------------------------------------------------------------| | A. | Total Sharable Rcvenue | 2,9,18,123,505,582 | | | B. | NationalGovernnrent | 2,549,139,627,435 | | | C. | Equalization F-u nd | 7,867,090,000 | 0.50io | | D. | County equitable share | 39t,116,788,147 | 24.860 |

Dated the.

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MEMORANDUM OF OBJECTS AND REASON

The principal object of this Bill is to provide for the equitable division of revenue raised by the National Govemment among the national and county levels of government as required by Article 218 of the Constitution in order to facilitate the proper functioning of governments and to ensure contiauity of service delivery to the citizens.

Clauees I and 2 of the Bill provide for the short title of the Bill and the interpretation of terms used in the Bill, respectively.

Clauee 3 of the Bill contains the provisions on the objects and purpose of the Bill.

Claure 4 of the Bill prescribes the allocations for the National Government and the county governrnents from the revenue raised nationally for the financial year 2024125.

Claute 5 of the Bill outlines the mechanisms for adjusting for variations in revenues emanating from rwenue performance during the financial year in which this Bill relates to.

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Njuguna Ndung'u, C.B.S Cabinet Secretary for The National Treasury and Economic Planning

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APPENDIX

EXPLANATORY MEMORANDUM TO THE DIVISION OF REVENU[.BILL,}O24

Background

• l. This memorandum has been prepared as an attachment to the Division of Revenue Bill (DoRB), 2024 in fulfihnent of the requirements of Article 218(2) of the Constitution and Section 191 (5) of the Public Finance Managernent Act, 2012.

2. Article 218 (2) of the Constitution requires that the Bill be submitted to Parliament every year together with a memorandum explaining:

• a) The proposed revenue allocation set out in the Bill;
• b) The extent to which the Bill has taken into account the provisions of Article 203 (l) of the Constitution; and
• c) A summary of any significant deviation from the recornmendations of the Commission on Revenue Allocation (CRA), with an explanation for each such deviation.

3. Section l9l (5) of the Public Finance Management Act,2Ol2 requires that the Bill be accompanied by a memorandum which explains:

• a) how the Bill takes into account the criteria listed in Article 203(l) of the Constitution;
• b) the extent of the deviation from the commission on Revenue Allocation's recommendations;
• c) the extent, if any, of deviation from the recommendations of the lntergovemmental Budget and Economic Council; and
• d) any assumptions and formulae used in arriving at the respective shares mentioned in subsections (2) and (3).

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Explanation of the Allocations to the National and County Governments as Proposed in the Bilt

County Gover n me nts' E quita b le S h are

4. The Bill proposes to allocate county governments Ksh. 391.1 billion for the financial year 2024125 as equitable share of revenue raised nationally, which is an increase from a base of Kshs.374.5 billion allocated in the hnancial year 2023124. 5. l^FY 2023124, the Division of Revenue Act,2023, allocated Ksh. 385.4 billion to county govemments as equitable share. This allocation included Ksh. 10.9 billion being proceeds from the Road Maintenance Fuel Levy (RMFL) and Ksh. 425 million for Transfer of Library Services. The allocation of Ksh. 425 million was attendant resources for the personnel emoluments relating to thc library services transferred from the Kenya National Library Services in FY 2022/23 to the couoty govemments. 6. The RMFL, which was initially a conditional allocation to county governments for mainteaance of county roads, was folded up to be part of county goverffnents equitable share in FY X|llz2. However, the national and county govemments coordinating Summit meeting held on l0tb- 12ft February, 2023 resolved that RMFL allocation to counties shall be considered in FY 2024n5 through a restructured process. Further to this, a consensus has been built that attendant resources for RMFL be transferred to county governments as conditional allocations beginning Fv 2024Ds. 7. Taking into account these policy developments, the equitable share base has been revised from IGh. 385.4 billion allocated to counties :u;.FY 2023124, by netting off Ksh. 10.9 billion related to RMFL to Ksh. 374.5 billion. 8. The National Treasury has proposed an allocation of Ksh. 2,549.1 billion to the National Govorunent; and Ksh. 391. I billion to county govemments in FY 2024125, translating to an increase of Ksh. 16.6 billion (see Table l)

Table l: Equitable Revenue Share Allocation to County Governments,FY 2024125

| BUDGET I'IEM | Amount (Ksh. Million) | |-----------------------------------------------------------|-------------------------| | l. Baseline ( i.e. allocation in the previous FY 2023124) | 385,425 | | Less: | | | 2. Adjustment for RMFL | 10.933 | | 3. Adj usted Equitable share Base (l-2) | 374,492 | | Add | | | 4. Adjustment for Revenue Growh | t6,62s | | Equitable Revenue Share allocation for FY 2024/25 (3+4) | 39l,ll7 |

Source : National Treasury

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9. The proposed county governments' equitable revenue share allocation ofKsh. 391.I billion is informed by the following factors:

• a) Trends in the performance of revenue (this was taken into consideration in determining the Ksh. 16.6 billion increase in equitable share of revenw inFY2024/25);
• b) Increased expenditures for National Govemment for purposes of debt servicing coupled with a weakening shilling against the dollar;
• c) The Government commitment to implement a fiscal consolidation plan targeting to reduce the fiscal deficit to 3.9 percent of GDP l,mFY 2024125. This is designed to slow down accumulation of public debt;
• d) Financing constraints due to limited access to finance in the domestic and international financial markets;
• e) Low ordinary revenue collections attributed to the ongoing geopolitical shocks. This includes the Russia-Ukraine war and the US Federal Reserve's interest rate hike which has negatively affected the dollar exchange rate against the Kenya shilling and the intemational debt market; and

7. I The National Govemment continues to solely bear shortfalls in revenue in any given financial year. However, County Govemments continue to receive thet full allocation despite the budget cuts affecting the National Government entities. 10. The above proposed Equitable Share for FY 2024/25 of Ksh 391 .l billion is equivalent to 24.86 per cent of the actual revenues raised nationally of Ksh 1,573,418 million for FY 2019/20, as per the records of the National Treasury. However, the last audited reveDue raised nationally, as approved by the National Assembly is Ksh I ,673 billion implying an overstatement of Ksh 100 billion. This discrepancy has since then been raised with the Office of Auditor-General and the Office of the Auditor-General has since responded to the National Treasury modifying the audited revenues for the FY 2}lgl2}, to Ksh. 1,578,035,418,993. On revenue resulting from AMISON Grant of Ksh. 4.6 billion, the Auditor-General has determined that it is within the purview of the National Treasury to determine the sharable and non-sharable revenue/receipts with regard to the LN/AMISOM receipts in accordance with legislation. The modification to Ksh. 1,578,035,418,993 and the determination on the AMISON Grant of Ksh. 4.6 billion has since been communicated to Parliament for a resolution of the House.

Evaluation of the BiIl against Article 203 (1) of the Constitution

• ll. Article 218(2{b) of the Constitution requires division of revenue between the two levels of government and among county govemments to take into account the criteria set out in Article

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Division of Revenue Bill, 2024

203(l) of the Constitution. The criteria include factors such as: national interest, public debt and other national obligations and needs of the disadvantaged groups and areas, among others.

12. Table 2 provides an assessment of the extent to which the requirements of Article 203 (l) of the Constitution have been taken into consideration in estimating the division of revenue betwGeo the national and county levels of Government in the financial year 2024125.

Table 2: Evaluation of the Bill against Article 203 (l) of the Constitution

| | ffEM DESCRIftlON (Kshs. Millions | F\ 2020/21 | ttY2o2l t22 | t;y2022/23 | Fy2023/71 | ltY 2021/25. | |----|---------------------------------------------------------------------------------------------------------------------------------|--------------|---------------|--------------|-------------|----------------| | | ORDINARY R1]VENUT] I]XCLUDING AI | 1.574,009 | t,775,621 | 2,141,58,t | 2,56s,9s9 | 2,948,12,r.00 | | | National lntcrest Article 203 I a | 86.753 | 81.r97 | 92.166 | 97,854 | 106.8-10 | | | Wancement of securiry operotions (police vehicles, It lbopters, delense e tc.) | 24,816 | 22,26t | 24,299 | 23,969 | 23.96E.0 | | | Nationol irri tion & rtilizet clearance | r l,375 | I I,199 | 16,800 | 24,654 | 28,415.0 | | | Youth e | t6,t2't | t 4.54ri | 15,290 | l3,087 | 15,242.9 | | | Natbnol social solety net - (for older Persons, OVC, child welfare, presidential bursary, selere disability, Hunger Safety Net) | 28,832 | 29,286 | 31,0'14 | 3l ,120 | 34,181.0 | | | himary school dieital literacy program | r,500 | 1.800 | | | | | | Eraminalion bhool examinationfees (KSCE & KCPE& Grade 6(CBC | 4,103 | 4.103 | 5,003 | 5,023.47 | 5,023.5 | | tI | Public debt (Art. 203 tl IIbl) | 829.906 | I, t 7.r,0r 3 | 930.35,t | I,l87,7tt.l | t,352,610 | | | Other National obligations (Article. 203 nl[b]) | 518,356 | 557.E63 | 595.269 | 69l.l4lt | 7t9,092 | | | Peraions, constitutional salaries & other | t24,451 | 136.978 | 145.951 | 2l 1.019 | l8l,393.1 | | | 6rctibtrional comnissions (Art. 248(2)) i.e., CRA, SRC. NLC, NPSC, IEBC, TSC | 281,099 | 299.333 | 321,968 | 332 t97 | 378,455.8 | | | ladependent olfices (Art. 248(3)) - i.e., AG & CoB | 6,295 | 6,499 | 6,98 r | 8,756 | 9,351.9 | | C | Parliament | 36,222 | 37,883 | 38,477 | 4t,002 | 4t ,623.4 | | | Othcr constitutional institulions- Stale Law Olfice and | 8,154 | 8,3 71 | 8,713 | r 0,054 | 10,188.2 | | | Other statutory bodies (e.g., EACC, RPP, WPA, CAJ, IPOA. NGEC) | 6,6',74 | '1,036 | 8.462 | 9,002 | 9,100.9 | | | Judiciarv | 14,150 | t 7,918 | t8,29'7 | 22,28',t | 23,690.3 | | | Olhet statutory allocations/earmarkedfunds (e.g., NG- CDF,,lflimatiee Ac tion ) | 41,31 I | 43,845 | 46,420 | 56,532 | 65,282.5 | | | Emcrsencies IAn. 203 ( I )(k)] | s,000 | 5,000 | s,000 | 1,200 | 5,000 | | I) | a) Contingencies | 5,000 | 5.000 | s.000 | 1,200 | 5,000.0 | | | b) Stralegic grain reserve | | | | | | | I | ualizatio lund Art 203 I and | 6,s32 | 6,825 | 7,068 | 10.867 | r 1,400.0 | | | Of u hich | | | | | | | | a. Allocation in FY 2024/25 | | | | | 7,867 | | | b. Arrears | | | | | 3,533 | | F | BALANCE'TO I}E SIIARED BY THE 2 LEVELS OF GOVERNIITT]N'I' | t68,7'73 | -7,429 | 547.841 | 57'7,106 | 753,r92.0 | | | County Government allocation from revenue raised [atlonllly of which; - | 330.231 | 317,537 | 375,654 | 391,661 | 410,177.0 | | | itable Share Revenue | I16,500 | 3 70,000 | 370,000 | 380,645 | 39r,117.0 | | | b) Additio no I conditional a llocations lnanced lrou revenues raised nalionally | t3,'13t | 7 (17 | 5,654 | I r,016 | 19,060 | | G | Bala[ce lcft for the National Government | -161,458 | -384,966 | 112,189 | 185,4,15 | 343,015.0 |

Source: DORA 2020 - DOk4 2023

*N ational Treas ury proposals

13. National Interest: These are expenditures which relate to projects and programmes that: 2. r are critical to the achievement of the country's economic development objectives; 3. r potentially will have significant impact on social well-being of citizens; 4. r are anchored in the Vision 2030 and the Medium-Term Plan IV (2022 -2027); 5. r are addressing the Bottom-Up Economic Transformation Agenda (BETA) of the Government; 6. o have significant resource investrnent requirements and whose benelits accrue nationwide; and 7. o are contained in the 2024 Budget Policy Statement.

The identified programmes of national interest include: activities aimed at enhancing security operations; national irrigation and fertilizer subsidy initiatives; Youth Empowerment; provision of national social safety net for l'ulnerable groups, and school examination fees subsidy. Allocations for these programs is expected to increase significantly from Ksh. 97,854 million it 2023124 to Ksh. 106,830 million n 2024125 on account of increased allocation to fertilizer subsidy, youth empowerment and National social safety net programs.

14. Public Debt: The Bill has taken into account public debt related costs. These comprise the annual debt redemption cost as well as tbe interest payment for both domestic and extemal debt. ln financial year 2024125, the allocation for payment ofpublic debt related costs is expected to increase from Ksh. 1,187,784 million allocated in financial year2023124 to Ksh. 1,352,610 million allocated in the financial year 2024125. 15. Other National Obligations: As provided for under Article 203( I ) (b) of the Constitution, the Bill has also taken into account the requirements for other national obligations, such as, mandatory pension contributions and.ior payments, financing for constitutional offices, including Parliament and Judiciary as well as expenses relating to other statutory bodies. These are estimated to cost Ksh. 719,092 million in financial year 2024125 up from Ksh. 691,148 million allocated in the firancial year 2023 I 24. 3. f6. Fiscal Capacity and Efficiency of County Governments: The National Treasury has proposed an increase of Ksh. 16.6 billion equitable share to county governments. Similarly, it is expected that the county governrnents will also grow their Own Source Revenue (OSR). The National Treasury has further instituted measures to support county govemments enhance their revenue collection. These include development of the National Rating Bill, the County Govemments Revenue Raising Process Bill, the Model Tariffs and Pricing policy for adoption by county governments and recommendation for an Integrated County Revenue Management System. The National Treasury recornmends that the Senate considers reinstating the fiscal effort parameter

Division of Revenue Bill, 2024

intended to enhance OSR collection by the Counties in order to incentivize the attainment of the inteqded objectives of the above measures.

17. County governments' ability to perform the functions assigned to them and meet other developmental needs of the county governments: As explained above, the baseline for the aquitable share allocation for the financial year 2024125 was derived from the Division of Revenue Act,2023. This base line is informed by costing of expenditure for devolved functions dono at onset of devolution, which has been the basis for equitable share over the years. 18. Developmental needs of the county governments and their ability to perform the functions assigned to them: County govemments are allocated equitable share of revenue which is an uaconditional allocation to enable counties have autonomy to plan, budget and implement devolopment projects based on county priorities and account for the same. In addition, Article 209 ofthc Constitution has assigned counties revenue raising powers and as such counties are expected to irrprove and maintain sustained collection of their own source revenues. 19. Additionally, the equitable share to county governments is proposed to increase from an adjurted baseline of Ksh. 374.5 billion :fi.Fy 2023124 to Ksh. 391.1 billion nFY 2024125, an incr@se of Ksh. 16.6 billion, which is meant to facilitate county govemments enhance service delinery in performance of their assigned functions under the second part of the Fourth Schedule of the Constitution. 20. It should also be noted that, in order to balance between priority development and performance of the assigned frrnctions, the Third Basis fonnula is premised on eight parameters which relate to devolved functions assigned to county governments in Part II of the Fourth Schedule of the Constitution. Accordingly, counties will have to allocate a prescribed minimum to spec{fic firnctions contained in the Third Basis. 21. Thus, the proposed vertical division ofrevenue proposed in the Division ofRevenue Bill, 2024, therefore, takes into account the cost ofCounty Governments' developmental needs and it is expected that county governrnents will have the ability to perform the functions assigned and transferred to them as contemplated under Article 203(1) (0. 22. F,conomic Disparities within and among counties and the need to remedy them: Allocation of the sharable revenue (i.e., equitable share of Ksh.39l.lbillion) among counties is based on the Third-generation formula approved by Parliament in September, 2020 pursuant to provisions of Article 217 and paragraph l6 of the Sixth Schedule of the Constitution. The Third Basis formula which is applicable from FY 2020121 to FY 2024125 has taken into account the

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following parameters; (i) Population ( l8%); (ii) Health Index (17%); (iii) Agriculture Index ( 10%); (iv) Urban Index (5%); (v) Poverty Index (14%); (vi) Land Area Index (8%); (vii) Roads Index (8%), and; (viii) Basic Share index (20%).The horizontal distribution of County Governments' equitable revenue share allocation ofKsh.39l.l billion for FY 2024125 shall be based on the Third Basis Formula. It should be noted that the Third basis fomrula applied inFY 2024125, takes into account disparities among counties and aims at equitable distribution ofresources across counties.

23. Further, it should be noted that Ksh. 7.867 billion has also been set aside for the Equalization Fund in t^Y 2024/25, which for purposes of Division of Revenue in FY 2024125 translates to 0.5 per cent of the actual revenue for FY 2019120, as per the records of the National Treasury. This Fund is used to linance development progftunmes that aim at reducing regional disparities among beneficiary counties. 24. Need for Economic Optimization of Each County: Allocation of resources to County Govemments was guided by the historical costing of expenditures for flmctions assigned to the County Governments. The equitable share of revenue allocated to County Governments in the FY 2024125 is Ksh.39l.l billion, an allocation which is Ksh. 16.6 billion higher than the adjusted allocation of Ksh. 374.5 billion for FY 2023124. This is an unconditional allocation which means that the County Governments can plan, budget and spend the funds independently. With the resources, therefore, County Govemments are in a position to prioritize projects and consequently allocate resources, thus optimizing their potential for economic development. 25. Stable and Predictable Allocations of Coutrty Governments' Vertical Share of Revenue: The county governments' equitable share of revenue raised nationally has been protected from cuts that may be occasioned by shortfall in revenue raised nationally more so in the advent of the effects of projected global economic downtum in2024. According to Clause 5 of the Division of Revenue Bill (DoRB) 2024, ary shortfall in revenue raised nationally is to be borne by the National Government. 26. Need for Flexibility in Responding to Emergencies and Other Temporary Needs: Included in the equitable share of revenue for the National Govemment is an allocation of Ksh. 5 billion for the Contingencies Fund established pursuaot to Article 208 of the Constitution. This Fund will be used to meet the demands arising from urgent and unforeseen needs in all Counties that suffer from calamities in the manner contemplated under Sections 19 - 2 I of the Public Finance Management Act,2012. ln addition, the Public Finance Management Act,2Ol2 requires each county government to set up a County Emergency Fund. County governments are, therefore, expected to set aside at least 2 % of their budget as part of their allocation for this pu{pose.

27. It should be noted that after taking into account all the other factors contemplated under Article 203(1) of the Constitution, including the needs of county govemments, there is minimal resowces left to finance other National Govemment needs, such as defense, roads, energy etc. ln fact, this leaves a balance of Ksh 342.8 billion. This may occasion additional bonowing which may distort the fiscal framework already set out in the 2024 Budget Policy Statement.

Summary of Deviations from the Recommendations of the Commission on Revenue Allocations

28. The Division of Revenue 8111,2024 proposes to allocate county govemments an equitable sharq of Ksh. 391.1 billion from the shareable revenue raised nationally. The CRA, on the other hand, recommends County Governments' equitable share of revenue of Ksh. 398.14 billion as an uncouditional allocation to be shared among county govemments on the basis of the formula for sharing revenue approved by Parliament under Article 217 of the Constitution. The difference betwcen the proposed allocation by the National Treasury and CRA is occasioned by: - 2. (a) Adjustment for the base of Equitable share with RMFL: - whereas the National Treasury has adjusted the base of Equitable share for FY 2023124 of Ksh. 385.425 billion by netting off an allocation of Ksh. 10.933 billion to RMFL inFY 2024125 as reported by the Kenya Roads Board, CRA has adjusted it by Ksh. 9.8 billion allocated to RMFL inFY 2020121 and which was then the amount converted to equitable share. 3. (b) Adjustment for Revenue Growth: - given the above difference in the base, the National Treasury has proposed an increase of Kshs. 16.6 billion to county governments' equitable share, CRA has proposed an increase of Kshs. 22.5 billion, inFY 2024125. 29. Table 3 analyses the approaches by CRA and the National Treasury in computing the proposal on the division ofrevenue between the national and county governrnents inFY 2024125.

Table 3: Comparison of approaches towards recommendations of the Commission on Revenue Allocation and the National Treasury on the equitable share of revenue proposed torFY 2024125

| | Expenditure ltenl | CRA A(million) | National Treasury B(million) | Variance C=(A-B(million)) | |------------------------------------|-----------------------------------------|------------------|--------------------------------|-----------------------------| | l. | Equitable Revenue Shrre in F\'2023121 | 385,42s | 385,rt25 | | | | Less | | | | | | l.l. Ad.iustment for RNI l-L | *9,800 | ** 10,933 | ( l,l3-3) | | 2. | Adjusted Equitable share Base (l - l.l) | 375,625 | 37 4,492 | 1,133 | | | Add | | | | | 3, | Increase in Revenue Allocation | 22,520 | 16,625 | 5,895 | | TOTAL EQUITABLE oF *"usNgB = (2+3) | TOTAL EQUITABLE oF *"usNgB = (2+3) | 398,145 | 391,1l7 | 7,028 |

Source: The National Traasury

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• Allocations to RMFL in FY 2020121; and which was then the amount converted to equitable share while ** projected allocations to RMFL l.nFY 2023124 as reported by the Kenya Roads Board.

Assumptions Used in Arriving at the Respective Shares

30. In arriving at the above allocations, the National Treasury was inforrned by the following assumptions:

• I. Funds for maintenance of county roads will be transferred as conditional grants.
• II. The Equalization Fund arrears will be financed from the National Government's share of revenue.
• m. That there will be no major economic shocks that may negatively affect revenue collection.
• IV. The govemment will mobilize enough resources from the domestic market to finance the deficit.
• V. Depreciation of the shilling against the dollar will stabilize.
• VI. Counties will continue to enhance their own sources of revenue to promote economic growth at the local levels.

Conclusion

• 3f. The proposals contained in the Bill take into account the fiscal framework set out in the 2024 BPS and are intended to ensure fiscal sustainability specifically against the back&op of escalating expenditure pressure on the fiscal framework occasioned by increase in Consolidated Fund Services (CFS) and the persistent under performance of the ordinary revenue.

32. The proposed equitable share allocated to county govemments in the Division of Revenue Bill,2024 has also taken into accor.mt the approved Thtd Basis Formula for Revenue Allocation. The proposed Kshs. 391.1 billion allocations among county govemments pursuant to Article 217 of the Constitution is equivalent to 24.86 per cent ofthe actual revenue for FY 2019/20, as per the records of the National Treasury and as confirmed by the Oflice of the Auditor General. This is above the minimum threshold required under Article 203(2) of the Constitution.

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