BusinessPeople Daily

Commission cautious on new formula for revenue

Steve Umidha @steveumidha

With seven months to go until a new formula for revenue sharing across the 47 counties is released, Commission on Revenue Allocation (CRA) is now unsure whether to retain the current formula or adopt a third-generation plan.

This has increased anxiety around the contentions issue that has already attracted conflicting views from policy makers. Chairperson Jane Kiringai was yesterday non-committal on whether the commission would come up with a new revenue sharing formula for counties before the next financial year, implement a new plan or stick with the current structure.

She described the process as technical and one that requires objective and consultative approach from the governors, Parliament and the public.“The options are still open, we could either come up with a new one as is expected or stick to the current one, we are still in the early stages of review process,” said Kiringai,

She, however, acknowledged that time was running out for a new plan to be in place on time to cool down emerging divergent voices on the matter.

“We still have time until the next financial year to have it in place, this one will be very objective,” she said, adding that the commission was yet to settle on the parameters to be used for the tedious process.

The second generation formula pegs equitable share on population at 45 per cent, basic equal share at 26 per cent, poverty at 18 per cent, land area at eight per cent, fiscal responsibility at two per cent and development factor at one per cent.

There have been concerns from some counties which are opposed to the present set-up, saying it is not balanced owing to the huge chunks of revenues allocated to some counties.

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