CRA Engages the National Assembly on the Division of Revenue Bill, 2025
The Commission, led by our Vice Chair, Koitamet Olekina, on Friday, 28th March, 2025 presented its Memorandum on the Division of Revenue Bill, 2025 to the National Assembly’s Budget and Appropriations Committee. This is in line with the Commission’s constitutional mandate under Article 216(1) to make recommendations concerning the basis for the equitable sharing of revenue between the national and county governments.
Members of the Parliamentary Committee (left photo) and CRA Vice Chairperson Koitamet Olekina (far right) and Commissioner Fatuma Gedi (right photo)
The Division of Revenue Bill (DoRB), 2025 is a key legislative proposal that sets out the equitable allocation of nationally raised revenue between the two levels of government for the 2025/26 financial year. The DORB was published on March 12, 2025, and tabled for its first reading in the National Assembly on March 14, 2025.
Key Allocations Proposed in the Bill
- Total Shareable Revenue: KSh. 2.835 trillion
- National Government Allocation: KSh. 2.419 trillion
- County Governments’ Equitable Share: KSh. 405.1 billion (an increase of KSh. 17.6 billion from the previous year)
- Equalization Fund: KSh. 10.589 billion (includes KSh. 7.853 billion for 0.5% allocation and KSh. 2.737 billion in arrears)
Key Issues and Recommendations by CRA
In its memorandum, CRA raised a number of concerns and proposed amendments to strengthen the equity and legal accuracy of the Bill:
- Correction of Constitutional References
- The Bill cites Article 203(2) as the basis for equitable sharing between the two levels of government. CRA recommends replacing this with Article 202(1), which correctly provides for the equitable sharing of nationally raised revenue.
- Decline in County Allocation Share
- CRA noted a decline in the county governments’ share from 10.4% in 2024/25 to 9.3% in 2025/26, even as the share to the national executive increased.
- The Commission reiterated its recommendation for county governments to receive KSh. 417.4 billion, and the national government KSh. 2.409 trillion, to uphold the spirit of devolution and support counties in meeting their growing financial obligations.
- Mischaracterization of National Interest
- CRA expressed concern that the Bill equates “national interest” exclusively with national government priorities, whereas national interest programs can be implemented by either level of government, in line with the principle of subsidiarity.
- Revenue Sharing Among Counties Post-2024/25
- The Bill references the use of the Third Basis for revenue sharing among counties up to 2025/26. However, the Third Basis is only applicable up to 2024/25. CRA advised that Parliament provide guidance on the formula to be used going forward and noted that it has already submitted its Fourth Basis recommendation for consideration.
- Equalization Fund Arrears
- The Bill proposes that KSh. 2.7 billion in Equalization Fund arrears be financed from the national government’s equitable share. CRA maintains that this should not justify the suppression of county governments’ equitable allocation, as the Equalization Fund is a special purpose fund under Article 204(1) of the Constitution.
Importance of Public Participation and CRA’s Role
Parliament’s legislative process includes opportunities for debate, amendment, and public input, reinforcing Kenya’s commitment to participatory governance and transparency in public financial management.
As part of its constitutional role, CRA contributes to the national budget process by offering expert analysis, constitutional interpretation, and evidence-based recommendations. The Division of Revenue Bill plays a critical role in ensuring that both levels of government are adequately funded to deliver on their mandates.
Further Information
Access CRA’s FY2024/25 Recommendations on the Basis for Equitable Sharing of Revenue Between the National and County Governments here: Download
