The Commission on Revenue Allocation (CRA) and the Office of the Controller of Budget (CoB) will be granted indirect access to records of the planned integrated revenue management systems of the 47 Counties in new proposed regulations by the National Treasury aimed at prudent use of public resources.
The public finance management (integrated county revenue management system) regulations, 2025 propose to create a centralised system for the management of the counties’ own-source revenue (OSR), to enhance transparency and accountability in OSR management.
The draft regulations were published by Treasury this week.
The integrated county revenue management system will automate the collection of various fees, levies, charges, and taxes in counties, while also providing real-time data and reporting tools for visibility into counties’ OSR performance.
The system will also support multiple payment channels including digital and bank deposits, and will have built-in auditing and record-keeping functionalities, the proposed regulations note.
The proposals by Treasury aim at having all monies collected by counties as OSR visible to oversight bodies, and to empower the bodies in making decisions regarding counties’ budgetary issues.
“The Commission on Revenue Allocation (CRA) shall have access to reports approved by the county executive committee member generated by the system to monitor revenue generation across counties and advise the national and county governments on revenue allocation,” the draft regulations state.
They also propose that the Auditor-General shall have access to and conduct audits on the system to ensure that revenues collected by counties as OSR are legal.
“The Controller of Budget shall have access to reports approved by the county executive committee member generated by the system to monitor revenue generation across counties and advise on budget implementation,” the regulations added.
The CRA has a core mandate of recommending a formula for the equitable sharing of revenue raised nationally between the national and county governments and among the devolved units.
The CoB oversees the implementation of government budgets through authorisation of withdrawals from public funds and reporting on utilisation.
The new proposals come at a time when the existing model of counties' collection and management of OSR, where each county implements its individual model for collection, has been blamed for resulting in double taxation for businesses operating across different counties, while also having gaping loopholes that could be abused.
Over the nine months to March, counties collected Sh45.9 billion in OSR, against an annual target of Sh87.1 billion. Counties have never met OSR targets since the onset of devolution in 2013, though the performance has been improving.
The regulations want to standardise OSR collection and management across all counties and integrate the system with systems in other government agencies and departments.
The system shall be hosted, administered, and maintained by Treasury.
“The National Treasury shall ensure integration of the System with other government systems and authorized payment channels or systems, ensure regulated access to reports generated by the system by the public and other stakeholders, and be responsible for the location and core infrastructure of the system,” the draft regulations state.
Treasury will also be responsible for internal audits of the system and will provide technical support for the deployment of the system across all the counties.
The system is expected to have modular components to cover various aspects of OSR streams, have real-time data processing capability to capture, record, and report transactions as they occur, and ensure automatic bank reconciliation of revenue collected.
“Each county government shall use the system for all OSR collection and management, conduct internal audits of the system, and ensure that all revenue-receiving bank accounts are integrated with the system for transparency and accountability,” the draft regulations state.
The counties will have 12 months to transition to the system after Treasury develops it.
