The Factors influencing the performance of own source revenue in counties: the case for Kwale County

Abstract

The main object of devolution is to make services available and closer to the people. However, service delivery has been affected by revenue challenges. The county governments mainly rely on funding from the National Government, and in some cases, delays occur, which in turn affect service delivery. Also, the funds provided by the National Government are not sufficient to accomplish the projects. For this reason, the county governments have been striving to improve their own source revenues (OSR) to supplement the funding from the National Treasury. However, the performance of OSR has faced various challenges, and it has been difficult for the county governments to meet their set Own Source Revenue (OSR) targets. This study aimed to determine the factors that influence the performance of OSR. Specifically, the study sought to determine the effect of public participation, revenue generation legislation, revenue collection systems, and human resources on OSR performance in Kwale County. A descriptive design was employed in the study. The study targeted Revenue Clerks, Revenue Officers and Finance Officers Data was collected from all four Sub-Counties in Kwale County (Matuga, Msambweni, Kinango and Lunga Lunga). Data from the Revenue Clerks was collected using a structured questionnaire. Data from other key informants was collected using interview guide questions. Data collected using structured questionnaires was analyzed using Statistical Package for the Social Sciences (SPSS) Version 26. Findings were presented using figures and tables. Data collected using interview guide questions was analyzed using the thematic method. The study generated key insights that may shape policies aimed at improving OSR performance in Kwale County as well as other 46 counties Descriptive analysis showed that public participation, County revenue legislation and revenue management systems positively influence the performance of OSR in Kwale County. Correlation analysis revealed that public participation, county revenue legislation and revenue management system had significant influence on the performance of OSR in Kwale County.This study offers empirical foundations that may be used as a basis for policy formulation, legislation and practice among revenue administrators at both levels of government (National and County Governments). The findings of this study are limited to the extent of the influence of the three internal factors on OSR. Other factors which are not included in the study may be responsible for the performance of OSR in counties. Further research may involve a comprehensive analysis of both internal and external factors that affect OSR performance among county governments in Kenya.