The Senate Standing Committee on Finance and Budget has approved its report on the Division of Revenue Bill for the 2026/2027 financial year, setting the stage for the House to debate the proposals.

In a statement posted by the Parliament on their Facebook page on Tuesday, March 31, 2026, senators focused on how national revenue shortfalls continue to affect county governments. The committee noted that reduced revenue collection has strained timely disbursements to counties.

“The Senate Standing Committee on Finance and Budget has adopted its report on the Division of Revenue Bill for the 2026/2027 Financial Year. While considering the report in Parliament Buildings earlier today, the primary focus of the deliberations centred on the impact of national revenue shortfalls on county governments,” the Parliament statement read in part.

“The Committee noted a significant divergence in the proposed revenue sharing framework, proposing an equitable share of Ksh454 billion to counties. This stands in contrast to the Ksh420 billion proposed by the National Assembly, with senators maintaining that the higher allocation is necessary to sustain devolved functions amidst rising operational costs,” the parliament statement read in part.”

Proposed allocation to counties.

The committee has recommended an equitable share of Ksh454 billion, higher than the Ksh420 billion suggested by the National Assembly of Kenya. Senators argued that the higher allocation is critical to maintaining devolved functions, especially amid rising operational costs at the county level.

The Committee highlighted that while national government expenditure continues to grow, county governments often face delayed funding, creating fiscal pressure and affecting service delivery at the grassroots.

Lawmakers also expressed concern over the removal of a previously included protective clause designed to safeguard county allocations from arbitrary cuts due to revenue shortfalls. They warned that current revenue projections seem overly optimistic, pointing to a Ksh115.3 billion shortfall against targets as of December 2025.

The committee noted that public debt servicing now consumes about 48.5 per cent of ordinary revenue, limiting resources for essential services. Senators stressed that the county’s equitable share is a constitutional entitlement and must not be treated as a residual figure after national obligations are met.

Committee Chairperson Mandera Senator Ali Roba will table the report on the Senate floor for consideration by the plenary.