Assessment of Innovative Money-Collecting Systems Strategy for Mobilizing Own-Source Revenue in Isiolo County Government

Authors

  • Roba Abduba Qanchora Kenya Methodist University, Kenya
  • Paul Gichohi (PhD) Kenya Methodist University, Kenya
  • Susan Kambura Kenya Methodist University, Kenya

Keywords:

Own-sources Revenue, Resource Mobilization, Innovative Money-Collecting Systems, Income-Generating, Isiolo County Government

Abstract

The county governments are expected to mobilize their own-sources revenue to bridge the gap in equity share. Despite the elaborate national fiscal policies and legislative frameworks on own-source revenue mobilization, many county governments, including Isiolo, have continued to report deficiency and inability to increase their own-source revenue, adversely affecting service delivery. This study was set out to assess the innovative money-collecting systems strategy for enhancing own-source revenue in Isiolo County. The rational expectations theory of technology guided it. A cross-sectional descriptive survey research design was applied. Data was collected from the revenue-generating departments and county assembly-budget and finance committee. Since the target population (60) was small, all were included in the study. The content, construct, face validity, and reliability were applied to check the quality of the questionnaire used in data collection. Mean, frequencies, percentage, and factor analysis were computed using statistical package for social sciences, while regression analysis was used to test the hypothesis. The study found that Isiolo County heavily relied on equity share to execute its functions despite gazetting own-source revenue streams. One drawback was the weak innovative money-collecting systems strategy. The study noted a weak electronic revenue collecting system, hence, loopholes in own-source revenue mobilization initiatives. The need to re-address innovative money-collecting systems strategy was evident; hence the county government should adopt e-billing, e-payment, and security controls systems in collecting own-source revenue. The findings have implications on systems for collecting own-source revenue, budgetary allocation and further affect practices in collecting own-source revenue in Isiolo County government and others.

Author Biographies

Roba Abduba Qanchora, Kenya Methodist University, Kenya

Finance

Susan Kambura, Kenya Methodist University, Kenya

Finance

References

Aditya, P. K., & Muturi, W. Factors Affecting Revenue Collection Efficiency By County Governments In Kenya-A Case of Kiambu County. International Journal of Social Sciences and Information Technology, 3 (8), 2371, 2384. https://www.researchgate.net/profile/Patrick-Adenya/publication/328809171_factors_affecting_revenue_collection_efficiency_by_county_governments_in_kenya-a_case_of_kiambu_county/links/5c77dfb0a6fdcc4715a2ba32/factors-affecting-revenue-collection-efficiency-by-county-governments-in-kenya-a-case-of-kiambu-county.pdf

Africa Capacity Report [ACR], (2016). Capacity Imperatives for Domestic Resource Mobilization in Africa. https://www.acbf-pact.org/sites/default/files/ACR_2015_11_2015_Web_v2.pdf

Ayala, I. H. & Palacio-Vera, A. (2014). The Rational Expectations Hypothesis: An Assessment from Popper's Philosophy. https://ideas.repec.org/p/lev/wrkpap/wp_786.html.

Commission on Revenue Allocation [CRA], (2020). Statement by CRA on the Third Revenue Sharing Basis. https://cra.go.ke/2020/08/05/statement-by-cra-on-the-third-revenue-sharing-basis/

Commission on Revenue Allocation (CRA) (2019). Recommendation on the basis for equitable sharing of revenue between national and county governments financial year 2020/2021. https://www.crakenya.org/wp-content/uploads/2013/10/CRA-Recommendation-on-the-Basis-for-Equitable-Sharing-of-Revenue-Between-National-County-Governments-for-FY2020-21.pdf

Committee of Experts on International Cooperation in Tax Matters (2018). The role of taxation and domestic resource mobilization in the implementation of sustainable development goals. Twentieth session. https://www.un.org/esa/ffd/wp-content/uploads/2018/08/CRP19-The-Role-of-Taxation-and-Domestic-Resource-Mobilization-in-the-Implementation-of-the-Sustainable-Development-Goals.pdf

Coplin, N., & Nwafor, A. (2019). It’s not all about the money: Domestic revenue mobilization, reducing inequality and building trust with citizens. Oxfam library briefing papers. https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620754/bp-its-not-all-about-money-drm-080519-en.pdf

De Paepe, G., Hart, T. & Long, C. (2017). Domestic resource mobilization and the transition to sustainable development: Synthesis of Asia case studies. Oversees Development Institute Report. https://www.odi.org/sites/odi.org.uk/files/resource-documents/11753.pdf

Development Initiatives (2018). Strengthening sub-national government own-source revenue mobilization in Kenya: progress, challenges and opportunities. http://devinit.org/wp-content/uploads/2018/12/Strengthening-subnational-government-OSR-mobilisation-in-Kenya.pdf

Fjeldstad, O. H. (2013). Revenue mobilization at sub-national levels in Sudan. Sudan Report. https://open.cmi.no/cmi-xmlui/handle/11250/2475181

Githinji, L. M., Okuto, E. & Agembo, W. (2018). Devolved Governance and Financial Resource Mobilization in County Governments in Kenya: A Case of Kiambu County. The international journal of humanities & social studies 6(9), 16-30. https://www.researchgate.net/publication/328079833_Devolved_Governance_and_Financial_Resource_Mobilization_in_County_Governments_in_Kenya_A_Case_of_Kiambu_County/link/5bb649294585159e8d8672ca/download

Gituma, H. K. (2017). Determinants of effective revenue collection by Embu County, Kenya (Doctoral dissertation, University of Embu). http://www.repository.embuni.ac.ke/handle/123456789/2033

International Corporate Governance and Financial Regulation [ICGFR], (2018). https://s3-eu-west-1.amazonaws.com/s3.sourceafrica.net/documents/119525/Consolidated-Annual-County-Budget-Implementation.pdf

International Monetary Fund (IMF) (2019). International monetary fund annual report 2019: Our connected world. International Monetary Fund. https://www.elibrary.imf.org/view/IMF011/26120-9781498321563/26120-9781498321563/26120-9781498321563.xml?language=en

Isiolo County Government Consultancy Report (2019). Assessment of own-source revenue streams for Isiolo County. https://www.kesra.ac.ke/images/Research/Isiolo_County_Consultancy_Report_Final-1.pdf

Kangave, J., Nakato, S., Waiswa, R., & Zzimbe, P. (2016). Boosting Revenue collection through taxing high net worth individuals: The case of Uganda. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2776590

Karimi, H., Maina, K. E., & Kinyua, J. M. (2017). Effect of technology and information systems on revenue collection by the county government of Embu, Kenya. International Academic Journal of Information Systems and Technology 2(1), 19-35. http://41.89.240.73/handle/123456789/1695

Karori, N., Muturi, W., & Mogwambo, V. A. (2016). Influence of revenue collection efficiency on the operational performance of Kisii county government, Kenya. International journal of social sciences and information technology 2(3), 235-240. https://www.ijssit.com/main/wp-content/uploads/2016/06/INFLUENCE-OF-REVENUE-COLLECTION-EFFICIENCY-ON-THE-OPERATIONAL-PERFORMANCE-OF-KISII-COUNTY-GOVERNMENT-KENYA.pdf

Kessy, S. S. (2020). Electronic Payment and Revenue Collection in Local Government Authorities in Tanzania: Evidence from Kinondoni Municipality. Tanzania Economic Review, 9(2). http://196.44.162.39/index.php/ter/article/view/3449

Kimutai, B. D. (2017). Revenue Mobilization Approaches and their Influence on County Socio-Economic Development in North Rift Region, Kenya (Doctoral dissertation, Doctoral Thesis). School of Human Resource Development, Moi University, Eldoret Kenya). http://41.89.160.13:8080/xmlui/handle/123456789/313

Kosaye, S. (2018). Factors affecting revenue collection of county governments in Kenya, A case of Marsabit County. International journal of social sciences and information technology. 4(5), 289-305. https://www.ijssit.com/main/wp-content/uploads/2018/05/Factors-Affecting-Revenue-Collection-Of-County-Governments-In-Kenya.pdf

Kinoti, M. W. (2017). Influence of Green Marketing Practices and Corporate image on Performance of ISO 9000 and 14000 Series Certified Firms in Kenya. ORSEA Journal, 6(1) 1-12. http://www.journals.udsm.ac.tz/index.php/orsea/article/view/848

Musleh, U. A. (2017). Local Government Decentralization Efforts for Revenue/Resource Mobilization in Developing Countries: Rhetoric or Realities in Bangladesh. Journal of East Asian Studies, 15, 215-257. https://core.ac.uk/download/pdf/87163204.pdf

National Treasury, (2021 [A]). Press Release, 30th April 2021 – Budget & Finance Bill Presented to Parliament. https://www.treasury.go.ke/press-releases/

National Assembly, (2021). The Division of Revenue Bill. http://webcache.googleusercontent.com/search?q=cache:HoMKkxUKGDQJ:kenyalaw.org/kl/fileadmin/pdfdownloads/bills/2021/TheDivisionofRevenueBill_2021.pdf+&cd=3&hl=en&ct=clnk&gl=ke

National Treasury, (2021 [C]). Press Statement – Transfers to County Governments. https://www.treasury.go.ke/press-releases/

Ngicuru, P. N., Muiru, M. & Riungu, I. (2016). Effect of selected factors affecting revenue collection in Nairobi City County Government. American Journal of Finance 1(1),1 – 10. http://ir-library.egerton.ac.ke/handle/123456789/1447

Odanga, V. (2019). Revenue diversification in counties with a focus on Own Source Revenues (Doctoral dissertation, Strathmore University). https://su-plus.strathmore.edu/bitstream/handle/11071/6725/Revenue%20diversification%20in%20counties%20with%20a%20focus%20on%20Own%20Source%20Revenues.pdf?sequence=3&isAllowed=y

Okiro, A. (2015). The Effect of E-Payment System on Revenue Collection by the Nairobi City County Government (Master thesis, Strathmore University, Kenya). University)http://erepository.uonbi.ac.ke/bitstream/handle/11295/93274/Okiro_The%20effect%20of%20e-payment%20system%20on%20revenue%20collection%20by%20the%20Nairobi%20city%20county%20government.pdf?sequence=1.

Otieno, D. C. (2021). Kenyan debt unsustainable and has reached a crisis level – says Kenyan Peasants League. https://viacampesina.org/en/kenyan-debt-unsustainable-and-has-reached-a-crisis-level-says-kenyan-peasants-league/#:~:text=The%20loan%20is%20to%20be,or%2062.5%25%20of%20the%20economy.&text=82%20trillion%20before%20June%202022

Siddiquee, N. A., Nastiti, D., & Sejati, N. A. (2012). Regional autonomy and local resource mobilization in eastern Indonesia: Problems and pitfalls of fiscal decentralization. Asian Affairs: An American Review, 39(1), 44-68. https://www.tandfonline.com/doi/pdf/10.1080/00927678.2012.649636?needAccess=true

Tabachnick B. G., Fidell LS. (2007), Using Multivariate Statistics. Pearson Education Inc.

Tullock, Z. (2017). Developing Rural Municipalities’ Own-Revenue Sources. https://sustainabledevelopment.un.org/content/documents/1732The%20Challenge%20of%20Local%20Government%20Financing%20in%20Developing%20Countries%20_3.pdf.

UN-Habitat. (2015). The challenge of local government financing in developing countries. https://sustainabledevelopment.un.org/content/documents/1732The%20Challenge%20of%20Local%20Government%20Financing%20in%20Developing%20Countries%20_3.pdf

Wawire, N. (2020). Constraints to enhanced revenue mobilization and spending quality in Kenya. Policy Paper, 163. https://www.cgdev.org/sites/default/files/PP163-Enhanced-Revenue-Kenya-Full.pdf

Downloads

Published

2021-08-21

How to Cite

Abduba Qanchora, R. ., Gichohi (PhD) , P. ., & Kambura, S. . (2021). Assessment of Innovative Money-Collecting Systems Strategy for Mobilizing Own-Source Revenue in Isiolo County Government. Journal of Finance and Accounting, 1(2), 10–22. Retrieved from https://edinburgjournals.org/journals/index.php/journal-of-finance-and-accountin/article/view/46

Issue

Section

Articles