Institutional-Based Strategies for Enhancing Mobilization of Own-Source Revenue in Isiolo County

Abstract

The government of Kenya has clear national fiscal policies and legislative frameworks that guide national revenue allocation in 47 counties. However, the allocated revenue is notably insufficient in meeting all financial obligations of counties; hence county governments are expected to mobilize own-sources revenue to bridge the deficiency. 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 revenue collection, adversely affecting the service delivery to the public. This study was set out to analyze the institutional-based strategies for enhancing mobilization of own-source revenue in Isiolo County. It was guided by four objectives that aimed to assess human resource strategy, legislative strategy, innovative money-collecting systems strategy, and the COVID-19 business recovery support strategy to enhance its own-source revenue in Isiolo County. The study was guided by Agency theory, Adam Smith's Canons of Taxation theory, the rational expectations theory of technology, and Vroom's expectancy theory. A descriptive survey research design was applied. Data was collected from the revenue generating departments and county assembly-budget and finance committee. Since the number was small, the census method was adopted in getting the subjects of the study. A self-administered questionnaire was utilized to collect data from the respondents. A pre-test of research instruments was conducted in the Laikipia County government. Data quality was ensured through content, construct and face validity, while the Cronbach coefficient was used to check reliability. Data were analyzed by computing mean, frequencies, percentage, and factor analysis using a statistical package for social sciences. The hypotheses were tested using regression analysis. The results were presented using graphs and tables. The study found that Isiolo County relied heavily on equity share to execute its functions despite gazetting own-source revenue streams. This was attributed to weak own-source mobilization strategies. Specifically, the study found mild mechanisms and schemes for training, motivating and rewarding resource mobilization staff; weak regulatory policy on statutory, discretionary tax exemptions and waivers; and inadequate awareness programs on the operational structures and procedures on own-source revenue mobilization. Policies on revenue mobilization during the COVID-19 pandemic were not profound, while the electronic revenue collecting system was weak, hence creating loopholes in own-source revenue mobilization initiatives. Moreover, the COVID-19 business strategy implemented was not adequate in enabling the business community to cope with the effect of the pandemic. Need to re-address strategy framework was evident where all the four institutional-based strategies were statistically significant in enhancing mobilization of own-resource revenue. However, the COVID-19 business recovery strategy and human resource strategy appeared most significant in a combined model. The study recommends the Isiolo County government to strengthen capacity building programs on own-source revenue mobilization, institute schemes for motivating and rewarding concerned staff, adopt e-billing, e-payment, and security controls systems. Other measures include cushioning and provision of financial and moral support to facilitate businesses to recover from the effect of COVID19 pandemic. The study's findings have implications on budgetary allocation, development of institutional strategy framework, legislations, and policy development, and further affect practices in the collection of own-source revenue Isiolo County and others.