Division of Revenue standoff: Senate and National assembly hold firm on county allocation as mediation talks continue

Division of Revenue standoff: Senate and National assembly hold firm on county allocation as mediation talks continue

Parliament Buildings
Tuesday, June 17, 2025.

The Mediation Committee on the Division of Revenue Bill, 2025 held its third sitting today, as the National Assembly and the Senate continued to hold firm, with a deadlock persisting over the equitable share allocation to county governments.

Co-chair Hon. Samuel Atandi (Alego Usonga) reiterated the National Assembly's position, stating that the House can only commit to an allocation of Kshs. 410 billion, citing economic realities that limit fiscal flexibility.

"Out of the Kshs. 2.7 trillion revenue that is projected to be realized in the coming financial year, Kshs. 1.1 trillion will be used to pay interest on debts," Hon. Atandi explained. "I just want to remind you, even as you insist on advancing your figures upwards, you look at the fiscal space left. That is why you realize that from our side, climbing up is very, very difficult."

On the Senate’s side, Co-chair Sen. Ali Roba (Mandera) pushed for a higher allocation, arguing that counties have seen minimal increases in revenue share over the years despite growing needs and inflationary pressures.

"There is a bit of goodwill that has been shown by both sides in the reality of the circumstances, and we need to find convergence as quickly as possible," said Sen. Roba. "We should do that within the context of the fact that revenues to county governments have not been growing for the last six years as much. It's only one year when we moved from Kshs. 316 billion to Kshs. 370 billion."

Sen. Boni Khalwale (Kakamega) added that any shortfall in actual revenue collection should be absorbed by the national government, not the counties.

"We want our counties now to take off. We have managed debt. The President has spoken as much that the indicators of a performing economy are on the upward trajectory, and therefore I want to affirm my collection of the Senate that we remain at Kshs. 427 billion," he said. "Let the National Assembly listen to us and come up. If they refuse to come up, the Constitution is live. It will speak."

Hon. (Dr.) Robert Pukose (Endebess), supporting a realistic approach, agreed with the principle that counties should not suffer due to revenue shortfalls.

"I agree with Senator Khalwale that once the Division of Revenue is passed and we have a shortfall in revenue, then the national government bears the responsibility and that means it bears it through the supplementary budget, but the counties will not bear that responsibility," said Dr. Pukose. "But what happens is that if we pass a figure that is unrealistic, we end up with the counties having pending bills because the exchequer is not able to release money to the counties."

Despite the sharp differences, Senators maintained that revenue raised nationally should be shared equitably among the national and county governments as envisaged in the Constitution. 

In a slight move toward compromise, the Senate lowered its demand from Kshs. 427 billion to Kshs. 425 billion, while the National Assembly held firm at Kshs. 410 billion.

The mediation committee is expected to consult further and attempt to bridge the gap before reconvening for the next sitting.