Governments generally fund their expenditures through the revenues they collect from residents and additional sources of financing such as grants or loans – the latter primarily used to fund large development projects.
County Governments in Kenya have two main types of revenues, the ones they collect directly from residents – known as Own Source Revenues – and the ones collected at the national level and passed on to Counties as inter-governmental transfers, the largest of which is the “equitable share”. Note that the largest portion of revenue is collected at the national level as it is often easier and more efficient to centralize tax collection (e.g. income tax, import/export duties, VAT), but this does not imply that those revenues “belong” to the national government. In fact, the Constitution mandates that each level of government be assigned the amount of revenues needed to perform their roles and functions.
