National revenue and expenditure

Sources of government revenue

  • Taxes – these include Income Tax, Customs Duty and Value Added Tax.
  • Trade licenses.
  • Loans from World Bank and International Monetary Fund. These have to be repaid with interest.
  • Aid and grants from friendly countries. These are some form of gifts and do not need to be paid back.
  • Interest on government loans.
  • Rent paid by people occupying government houses and offices.
  • Court fines.
  • Dividends from shares bought by the government in profitable companies.
  • Rates paid by people who own property in urban areas.
  • Profits made by parastatal organisations.
  • Those in the tourism business pay some taxes to the bank.
  • Export from Kenya are sold earning the country income.
  • Profits earned on government loans
  • Profits made from sale of government property.
  • Money made from government institutions.

Forms of government expenditure

The government uses the money it collects to:

  • Repay loans.
  • Construct roads, schools and hospitals.

  • Provide basic services like education, health and security.
  • Pay salaries.
  • Repair government facilities.
  • To buy supplies needed in government offices
  • Fund emergencies and unforeseen needs.
  • Fund counties and constituencies

Sources of county government revenue

  1. Rates charged on county property
  2. Entertained taxes.
  3. Charges imposed on services provided by the county government.
  4. Loans borrowed from the national government and approved by the County Assembly.
  5. 15% revenue provided by the national government.
  6. Sale of county government property.
  7. Sale of trade licences.

Forms of county government expenditure

1. Paying salaries of county workers.

2. Repaying county debts.

3. Building and repairing county facilities

4. Buying county goods for development.

5. Funds for unforeseen needs and emergencies.

Role of government in the society

  • The Legislative arm of the government makes laws through parliament.
  • Protecting the rights and freedoms of its citizens.
  • Collecting revenue.
  • Improving the standards of living of the citizens.
  • Providing basic services such as health and education.
  • Providing security for all its citizens.
  • Paying salaries for all government employees.
  • Planning the expenditure for the country.
  • Preparing and reading the Budget on Budget day, on how the money collected is to be spent.
  • The government manages the natural resources.
  • Creates good relations between Kenya and other countries.
  • Develops and maintains infrastructure in the country.