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Senate passes new revenue sharing formula

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The Senate has passed the proposed third basis revenue sharing formula after a record 10 failed attempts to reach a consensus.

The senate unanimously voted to adopt the formula a few hours.

The new formula maintains the existing disbursement for the financial year 2020/21.

For the financial years, 2021 to 2025, the counties will start getting a new allocation based on the formula that was passed today.

The Senate factored in President Uhuru Kenyatta’s promise to up the share allocated to counties by Sh50 billion and worked with Sh370 billion in disbursement of revenue.

Half of the Sh370 billion allocation will be disbursed based on the amount each county received in the 2019/20 financial year.

The rest of the money will be subjected to the formula parametrers:

18 percent population index

17 percent health index

10 percent agricultural index

5 urban index

14 poverty index

8 percent land area index

8 percent road index

20 basic share index

The new formula was passed on the condition that no county will receive less allocation than what it received in 2019/2020 financial year.

The Senate had been under pressure to pass the new formula after county governments threatened to halt operations due to delay in disbursement of funds.

County governments have had a three-month delay in receiving the allocation of the 2020/21 financial year.

The struggling counties had been left to operate on bank overdrafts and independent revenue allocation channels.

Here is how the new formula will translate in new allocations:

Senate finally passes new formula; this is how it will work