UNCDF works with local governments promoting financial and fiscal accountability of the state to its citizens through local government development funds, performance-based grant systems, strengthening of local revenue streams, local procurement and accountable planning, budgeting and decision making.

Since 2013, Kenya has been operating a system of devolved government with 47 county governments. The county governments are in charge of overseeing basic service delivery including healthcare, education, and maintenance of the local roads network. Although the county governments receive a share of national revenues, they are also expected to mobilise revenue from alternative sources within their counties such as property and entertainment taxes.

Devolved governments are fairly new, and many laws and arrangements put in place are still being tested and will need to be reviewed and revised based on real experiences on the ground. Fiscal autonomy and sustainability of counties to create an adequate fiscal space for service delivery and inclusive local development remain a challenge. Hence, an important objective of the UN Joint Programme on Devolution in Kenya is to improve county capacities for revenue projection, generation, collection and reporting. Various reports and analyses indicate that the potential revenue capacity of Kenyan counties is two to three times higher than their actual collection.

UNCDF in partnership with the African Tax Administration Forum (ATAF) and supported by the International Monetary Fund’s TADAT Secretariat launched Phase 1 and Phase 2 of training and assessments using the Tax Administration Diagnostic Assessment Tool in eight Kenyan Counties – Makueni, Kilifi, Kisumu, Mombasa, Isiolo, Garissa, Lamu and Busia.

The Tax Administration Diagnostic Assessment Tool (TADAT) is an internationally recognized tool applied by tax administrations globally to establish the strengths and weaknesses in revenue administration to guide their reform agenda.

Initially designed for assessments at the national level, the IMF developed a version relevant for the subnational level that is also applicable to the Kenya context. To date, over 100 subnational assessments have been conducted around the world. The outcome of TADAT assessments guide counties on processes requiring improvement to enhance own source revenue collection and accountability to achieve the development agenda of the Counties, including further policy advice and support to tap into alternative revenue sources towards achieving the Sustainable Development Goals (SDGs).

This is part of the United Nations support to the evolving Kenya’s devolution process delivered through the UN Joint Programme on Devolution in Kenya. The programme is comprised of the UN Development Programme (UNDP), UN Children’s Fund (UNICEF), and UN Women and supported by Sweden, Finland, and Italy. This programme focuses on improving county governance capacity in areas related to poverty reduction and fighting inequality and discrimination.

The counties actively participated and collaborated in the conduct of TADAT assessments. TADAT assessments are helping the county governments to identify the areas of tax administration that need improvement and design specific actions to achieve their full tax potential. The assessments have highlighted a number of areas where improvements will result in increased revenue generation: more reliable and accurate taxpayer data; effective risk management; improved voluntary compliance and timeliness of tax payments; efficient revenue management and increased accountability and transparency. UNCDF, in cooperation with its partners, will continue providing support to partner counties in implementation of their revenue administration improvement and revenue enhancement plans.

H. E Sospeter Odeke Ojaamong', Governor, Busia County said, “I will endeavor to leave the County government revenue system better than I found it, and TADAT will help us to achieve this. We are grateful to UNCDF and its partners for the support.”

Dr. Ahmed Galgalo, County Secretary, Isiolo County said, “I urge the County officers who did not attain the TADAT exam pass mark to re-sit the examination, I intend to lead by example and attend the TADAT training plus sit for the examination.”