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FORMULA FOR SHARING REVENUE AMONG
COUNTY GOVERNMENTS
28TH FEBRUARY 2012
COMMISSION ON REVENUE ALLOCATION
100%> 15%
REVENUE RAISED NATIONALLY
100%
COUNTIES SHARE
COMMISSION ON REVENUE ALLOCATION
< 84.5%
NATIONAL SHARE
0.5%
EQULIZATION FUND
FORMULA
SHARING AMONG 47 COUNTY GOVERNMENTS
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1. AS SIMPLE AS POSSIBLE ;
2. BASED ON AVAILABLE OFFICIAL DATA ;
3. HAS INCENTIVES FOR EFFICIENT FISCAL MANAGEMENT;
4. MINIMISE INEQUALITIES AMONG COUNTIES; AND
5. GIVES EFFECT TO THE PROVISIONS OF THE CONSTITUTION
1. AS SIMPLE AS POSSIBLE ;
2. BASED ON AVAILABLE OFFICIAL DATA ;
3. HAS INCENTIVES FOR EFFICIENT FISCAL MANAGEMENT;
4. MINIMISE INEQUALITIES AMONG COUNTIES; AND
5. GIVES EFFECT TO THE PROVISIONS OF THE CONSTITUTION
COMMISSION ON REVENUE ALLOCATION
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ATTRIBUTES OF A GOOD REVENUE SHARING FORMULA
1. POPULATION
2. POVERTY INDEX
3. LAND AREA
4. BASIC SHARE
5. FISCAL DISCIPLINE
1. POPULATION
2. POVERTY INDEX
3. LAND AREA
4. BASIC SHARE
5. FISCAL DISCIPLINE
COMMISSION ON REVENUE ALLOCATION
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PARAMETERS CHOSEN
COMMISSION ON REVENUE ALLOCATION
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POPULATION
• USE OFFICIAL DATA FROM K.N.B.S
• THE SELECTION IS BASED ON TWO FACTORS:-
COST OF SERVICES DEPEND ON POPULATION SIZE
PROMOTION OF EQUITABLE SOCIETY ON PER CAPITA BASIS
COMMISSION ON REVENUE ALLOCATION
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POVERTY
• USE OFFICIAL DATA FROM K.N.B.S
• SELECTION OF POVERTY INDEX IS BASED ON:-
POVERTY COMPONENT TREATS EVERY POOR KENYAN EQUALLY IRRESPECTIVE OF LOCATION
COMMISSION ON REVENUE ALLOCATION
MAMA EKAI
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COMMISSION ON REVENUE ALLOCATION
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BASIC EQUAL SHARE
• EVERY COUNTY HAS FIXED EXPENSES IRRESPECTIVE OF SIZE, POPULATION AND POVERTY LEVELS
COMMISSION ON REVENUE ALLOCATION
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LAND SIZE
• USE OFFICIAL DATA FROM K.N.B.S
• COST OF SERVICE DELIVERY DEPENDS ON THE SIZE OF A COUNTY
• TO ENSURE EQUITY,PLACED MINIMUM AND MAXIMUM CONTRIBUTION TO TOTAL LAND MASS AT 1% AND 10% RESPECTIVELY
• BINDING INTRODUCES AFFIRMATIVE ACTION IN FAVOUR OF VERY SMALL COUNTIES
COMMISSION ON REVENUE ALLOCATION
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FISCAL DISCIPLINE
• BUILDS FINANCIAL PERFORMANCE INCENTIVE MECHANISM THAT WILL ENSURE THAT;
FISCAL MANAGEMENT
EXPLOITATION OF REVENUE POTENTIAL
• INITIAL EQUAL WEIGHT SINCE THERE ARE NO HISTORICAL FISCAL PERFORMANCE EVALUATION MEASURES
EQUITABLE SHARE Ca= ∑ Pi + PVi +Ai+BSi+FDi
WHERE
Ca = COUNTY REVENUE SHARE
P = COUNTY’s SHARE OF POPULATION COMPONENT
PV = COUNTY’s SHARE OF POVERTY COMPONENT
A = COUNTY’s SHARE OF LAND AREA COMPONENT
BS = COUNTY’S EQUAL SHARE COMPONENT
FD = COUNTY’S SHARE OF FISCAL DISCIPLINE COMPONENT
COMMISSION ON REVENUE ALLOCATION
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COUNTY EQUITABLE SHARE FORMULA
COMMISSION ON REVENUE ALLOCATION
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HOW ARE WEIGHTS ASSIGNED?
1. EXTENT THEY GIVE EFFECT TO THE PROVISIONS OF THE CONSTITUTION;
2. SIMULATIONS –RUN SEVERAL SCENARIOS
COMMISSION ON REVENUE ALLOCATION
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SUMMARY
PARAMETER %
POPULATION 60
EQUAL SHARE 20
POVERTY 12
LAND AREA 6
FISCAL DISCIPLINE 2
TOTAL 100
COMMISSION ON REVENUE ALLOCATION
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PARAMETERS AND WEIGHTS OF THE FORMULA
6%2%
COMMISSION ON REVENUE ALLOCATION
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CONTACTS
We take this opportunity to invite public comments to the
above proposed formula using any of the contacts given
below:
a)E-mail: [email protected]
b)Facebook Commission on Revenue Allocation
c)Twitter @crakenya
d)Website www.crakenya.org
COMMISSION ON REVENUE ALLOCATION
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TELEPHONE CONTACTSDr. Moses Sichei – Director, Research and Policy –
0715 766 975
Dr. Dulacha Barako - Advisor, CRA -
0715 766 980
Mr. Stephen Masha - Director, County Fiscal Affairs -
0707 091 286
Mr. George Muruli - Director, Communications - 0715
766 334
COMMISSION ON REVENUE ALLOCATION
THANK YOU
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