Nairobi Kenya,February 26st 2023 - Today marks the launch of phase 4 of the TADAT training and assessment of the County revenue administration systems in nine (9) Kenyan Counties – West Pokot, Tana-River, Meru, Kericho, Kirinyaga, Kisii, Nakuru, Kakamega and Trans Nzoia.

This fourth phase comes in the wake of the three previous phases completed in December 2020 – June 2022 in 11 Counties – Nairobi, Narok, Wajir, Kilifi, Kisumu, Makueni, Garissa, Mombasa, Lamu, Isiolo and Busia. Through this initiative, UNCDF and its partners support the evolving Kenya’s devolution process delivered through the UN Joint Programme on Devolution in Kenya and other UNCDF programme vehicles. Previously, UNCDF has supported six County governments subjected to TADAT assessments, to develop medium-term revenue enhancement action plans.

During the 16th Ordinary Session of Intergovernmental Budget and Economic Council held on 5th April 2022, it was noted that own source revenue is a sleeping giant that can unlock the economic potential and growth of county governments. This paved way to the endorsement of the partnership between the Office of the Controller of Budget and UNCDF that will enhance the generation of own revenues, thereby helping to tackle the problem of pending bills. The Controller of Budget issued a circular to all the County governments in Kenya, instructing them to set up frameworks and allocate budgetary resources to conduct TADAT training and assessments, including identification of key relevant staff involved in key revenue activities.

To this end, UNCDF in cooperation the Office of the Controller of Budget, Kenya School of Revenue Administration (KESRA), Intergovernmental Budget and Economic Council (IBEC), Council of Governors (CRA) and Commission on Revenue Allocation (CRA) and supported by the International Monetary Fund’s TADAT Secretariat, plans to conduct TADAT training and assessments using the Tax Administration Diagnostic Assessment Tool to achieve the following objectives:

• Capacity building for the County officers on what constitutes international best practice for a tax administration/County revenue administration for the various performance outcome areas
• Identify the relative strengths and weaknesses of the County revenue administration system by reference to each indicator.
• Provide baseline and set the reform agenda for the County revenue administration by focusing on the key initiatives which can enhance revenue administration at County level.

According to the Comprehensive Own Source Revenue Potential and Tax Gap Study of County Governments prepared by the Commission on Revenue Allocation in June 2022, own source revenue mobilization is an important aspect in adherence to fiscal responsibility principles especially in light of the constrained national fiscal framework. The report set clear targets which Counties can work towards in their revenue mobilization and reform journey.

The Tax Administration Diagnostic Assessment Tool (TADAT) used for the assessment is an internationally recognized tool developed by the International Monetary Fund (IMF) and its partners and 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, a version relevant for the subnational level was developed, has been applied internationally and is also applicable to the Kenya context.

The outcome of such an assessment would act as a guide to counties on functional areas requiring improvement for enhanced revenue mobilization and accountability to achieve the development agenda of the Counties, including further policy advice and support to tap into alternative revenue sources.
UNCDF is very grateful to the Office of Controller of Budget, Intergovernmental Budget and Economic Council (IBEC), Kenya School of Revenue Administration (KESRA), Commission on Revenue Allocation, Council of Governors and the respective County governments for their support to this initiative and looks forward to working closely with the County government on these assessments as well as on developing revenue enhancement action plans.