President William Ruto has signed the Division of Revenue Bill 2025 into law at State House, Nairobi, officially setting the framework for how national revenue will be shared between the national and county governments in the 2025/2026 financial year.
The new law provides for the equitable distribution of funds to support service delivery at both levels of government. It was passed by both the National Assembly and the Senate after going through mediation, where key amendments were made to the original proposals.
Under the signed law, the national government will receive Sh2.3 trillion, while county governments will get Sh415 billion. Additionally, Sh9.6 billion has been allocated to the Equalisation Fund to support marginalized areas.
The Bill was first introduced by Alego Usonga MP Samuel Atandi. It had initially proposed a total of Sh2.84 trillion in revenue to be shared, with Sh2.42 trillion for the national government and Sh405.1 billion for counties—an increase of Sh17.6 billion from the previous financial year.
However, the Finance Committee revised the revenue projections downwards to Sh2.76 trillion, citing reduced revenue collection. The Senate also introduced key changes, including using revenue figures from the 2021/2022 financial year, which recorded Sh1.92 trillion, instead of the previously used 2020/2021 figures that showed Sh1.57 trillion.
Following these adjustments, the final allocation to counties was increased to Sh465 billion.
The signing of the Division of Revenue Bill now paves the way for the County Allocation of Revenue Bill, which will outline how the Sh465 billion will be shared among Kenya’s 47 counties.
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