Alma Economics sought to identify the maximum revenues that each County Government in Kenya can generate from a set of Own-Source Revenue (OSR) streams and estimate gaps between maximum and actual revenues. The work was commissioned by the Commission on Revenue Allocation (CRA) of Kenya in collaboration with the National Treasury, County Governments, the Kenya National Bureau of Statistics (KNBS), the Council of Governors, and the Controller for Budget, with the support of the World Bank.

We developed a methodological framework including individual models for each OSR stream drawing from various sources, including County Government Finance Acts and Bills, audited data on revenue collections (made available by the Office of the Auditor-General in the County Governments’ Financial Statements), as well as from surveys and interviews with County Government representatives. Our analysis identified the counties with the best performances in raising revenues for each stream (considering the county-specific economic base for each stream) and estimated the maximum revenues that County Governments could generate from each stream if they operated in line with best practice.

Key findings suggest that counties can substantially improve their collection of revenues through revising their current policies and collection systems – for example, by streamlining taxation and fee structures and allowing automatic and cashless payment systems.

Our research offers an in-depth understanding of key issues around raising revenues from own sources to policymakers in Kenya, thus contributing to the establishment of an effective and fair system for revenue collection across the country.

➥ Read the report here.