Review of the County Government Own Source Revenue Policy and Bills - Kenya Private Sector Alliance (KEPSA)


The National Treasury developed the draft National Policy on County Governments Own Source Revenue 2016 and the Draft County Own Source Revenue Bill, 2016 to address problems identified in the county governments’ exercise of their power to impose, vary or waiver taxes, fees, levies and other charges.

KEPSA successfully analysed the draft Policy and Bill and conducted country-wide meetings in five regions to seek further private sector input on the draft policy documents in 2017. The consolidated private sector proposals submitted to Senate sought the following objectives:

  • Resolving double taxation of certain goods and services;
  • Eliminating unlawful taxation unsupported by legislation;
  • Rectifying administrative inefficiencies in the collection of levies;
  • Ensuring commensurate provision of services for charges levied.

The draft Policy and Bill were not adopted by the previous administration. The current administration has substantially revised the documents in efforts to provide a policy framework to guide operationalisation of the constitutional provisions on county own source revenue. However, the revisions have resulted in various challenges including:

  • The scope of the draft Bill is currently limited to the regulation of the county procedure for imposing taxes, fees, levies and charges as opposed to both procedure and other substantive issues of the imposition of taxes that affect both counties and payers of the taxes;
  • There lacks clarity on taxation as it relates to functions that are implemented by national and county governments concurrently;
  • There is no requirement for county governments to illustrate the need for taxes or the commensurate provision of services for charges levied;
  • The lack of an appropriate body to resolve disputes related to county revenue arising at both intra and intercounty levels;
  • The lack of harmony in the categorisation of businesses for taxation purposes.

While the County Own Source Revenue Bill, 2016 has not been passed, a new County Government (Revenue Raising Process) (CGRRP) Bill, 2018 has been tabled in parliament.

KEPSA seeks to reengage in:

  • reviewing the;
  1. County Governments Own Source Revenue National Policy, 2016;
  2. Draft County government (Tax Regulation) Bill, 2016; and
  3. County Government (Revenue Raising Process) (CGRRP) Bill, 2018.
  • consulting stakeholders.

This will enable KEPSA advocate amendment of the 3 instruments.


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