The National Assembly  has approved the Division of Revenue Bill, 2026, setting the stage for the allocation of nationally raised revenue between the national and county governments for the 2026/2027 financial year.

Moving the Second Reading of the Bill, the Chairperson of the Budget and Appropriations Committee, Hon. Samuel Atandi told the House that the legislation is anchored on Article 218 of the Constitution of Kenya, which requires Parliament to determine how revenue collected nationally is shared between the two levels of government.

The Bill proposes that out of an estimated KSh 2.901 trillion in shareable revenue, the national government will receive KSh 2.472 trillion, while county governments will receive an equitable share of KSh 420 billion. A further KSh 9.6 billion will go to the Equalisation Fund to support marginalised areas.

“The purpose of this Bill is to allocate resources raised nationally between the county governments and the national government,” the committee chair said, noting that the proposal aligns with the recently approved Budget Policy Statement for 2026.

According to the Schedule to the Bill, which sets out the vertical division of revenue, the allocations are based on the most recent audited and approved accounts for the 2022/2023 financial year, as required under Article 218 of the Constitution.

Hon. Atandi further explained that the Bill also provides additional funding to address arrears in the Equalisation Fund. An extra KSh 5.6 billion has been included as partial payment of outstanding allocations, bringing the total funding for the Equalisation Fund in the 2026/2027 financial year to about KSh 15.2 billion.

“The National Treasury projects shareable revenue at KSh 2.901 trillion, while CRA projects KSh 2.98 trillion. The difference of about KSh 80 billion is largely due to economic shocks that may affect revenue performance,” Hon. Atandi explained.

Members raised concerns about delayed disbursements to counties. Legislators noted that about KSh 34 billion allocated to counties in the previous financial year was not released before the close of the year, affecting service delivery.