Kenyan Counties Can Generate KSh 260 Billion Annually Through Local Taxes, Says CRA

CRA: Counties Could Collect KSh 260 Billion Annually in Local Revenue with Reforms

Nairobi, Kenya – May 27 — Kenya’s 47 county governments have the potential to collectively generate up to KSh 260.6 billion annually through own-source revenue (OSR) streams such as property rates, business permits, and other local levies, according to the Commission on Revenue Allocation (CRA).

Speaking at a fiscal policy forum in Nairobi, CRA Vice Chairman Koitamet Ole Kina emphasized that most counties are significantly underperforming in revenue collection, capturing only around 65% of their total potential. He attributed this gap to weak enforcement frameworks, outdated valuation rolls, and inefficient administrative systems.

“Counties must undertake comprehensive revenue mapping to identify and fully exploit untapped tax streams,” Ole Kina urged. “Maximizing own-source revenue is vital not only for reducing dependence on national government disbursements, but also for strengthening service delivery at the grassroots level.”

The CRA has lauded counties such as Nakuru and Mombasa for pioneering reforms in local revenue systems — including digitizing service payments and streamlining tax compliance mechanisms — which have led to improved collection rates and better financial accountability.

To support broader reform efforts, the CRA is currently developing new guidelines to help counties design model tax policies tailored to their unique economic contexts. Ole Kina noted that the forthcoming OSR regulations will aim to promote fiscal autonomy and empower county administrations to build more resilient, self-sustaining local economies.

“We must rethink our approach to public finance,” he added. “Adopting best practices in revenue administration will be key to unlocking Kenya’s devolved development potential.”

The call for counties to step up revenue mobilization efforts comes amid growing fiscal pressure on the national budget and increasing demand for decentralized service delivery under Kenya’s devolution framework.