Only five counties met their revenue targets in the year to June 2021, leading to an under-collection of Sh 19 billion of internally generated funds.
Treasury data submitted to Parliament shows that the 47 county governments collected Sh 34.4 billion against the target of Sh 53.7 billion.
Treasury Cabinet Secretary Ukur Yatani said the collection represented 64.1 percent of the OSR target of Sh 53.7 billion in the financial year 2020 21.
Only five county governments could collect more than one hundred percent of the annual OSR in the financial year 2020, said Yatani in the 2022 Pre-Election Economic Fiscal Report, which was tabled in Parliament ahead of the indefinite adjournment sine die to pave way for August 9, General Election.
The five counties that surpassed their revenue targets were not disclosed by Yatani.
If revenue leakages can be fixed, counties can raise Sh 173 billion annually, according to the Treasury.
The Treasury statistics show that over Sh 2.4 trillion has been disbursed to counties since the advent of devolution eight years. These include revenue raised nationally and conditional allocations from the national government share or revenue as well as proceeds of loans and grants from development partners.
The counties were allocated Sh 370 billion in the financial year, according to the revenue collected by the national government.
The Constitution says that 15 percent of the total audited revenue raised nationally will be shared among the 47 counties.
The Constitution allows a county to impose property rates, entertainment taxes and any other tax it is authorised to impose by an Act of Parliament.
The National Treasury in collaboration with the Ministry of Lands developed the National Rating Bill, 2022, to replace the outdated Valuation Act Cap 266 and Rating Act Cap 267 Mr Yatani said.
He said that the bill was submitted to Parliament in January and is expected to guide valuation for rating and imposition of rates on ratable property in county governments.
Three viable options for a single integrated revenue management system for counties have been identified, according to Yatani.
He said that the approval of a viable Integrated County Revenue Management System ICRMS by MAT will lead to the piloting and rollout of the revenue system to the county governments.