The core mandate of the Commission on Revenue Allocation (CRA) is to recommend the basis for equitable sharing of revenue raised nationally between the national and the county governments, and among the county governments. The horizontal recommendation refers to the submission made by the Commission on the basis for equitable sharing of revenue raised nationally among county governments. This is the third recommendation for revenue sharing among county governments and is anchored in a revenue sharing framework which seeks to closely align funding to functions assigned to county governments to enhance service delivery. It takes into account the need to address developmental gaps and economic disparities among counties, and seeks to create incentives for county governments to adhere to principles of fiscal responsibility and to optimize their capacity to raise own revenue. The Commission recommends a phasing-in of the formula to avoid disruption in service delivery and development programs. The proposed approach is to set aside 15 percent of the equitable share increment to cushion counties which would see a reduction in the quantum of their equitable share in excess of 5 percent.
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