REVENUE ENHANCEMENT STRATEGIES AND GROWTH OF OWN SOURCE REVENUE IN COUNTY GOVERNMENT OF MACHAKOS, KENYA
REVENUE ENHANCEMENT STRATEGIES AND GROWTH OF OWN SOURCE REVENUE IN COUNTY GOVERNMENT OF MACHAKOS, KENYA
Benson Mulinge Mutua - Department of Accounting and Finance, Kenyatta University, Kenya
Dr. Francis, K. Gitagia (PhD) - Department of Accounting and Finance, Kenyatta University, Kenya
ABSTRACT
Machakos County revenue reports show that OSR contributed less than 15% of total revenue between 2017 and 2023, despite the Commission on Revenue Allocation (CRA) estimating that counties could generate up to Kshs. 260.6 billion if fiscal instruments were fully optimized. This persistent underperformance points to structural and strategic gaps in revenue generation mechanisms. Therefore, the specific objectives of this study were to determine the effect of revenue diversification strategies and revenue digitization strategies on the growth of own source revenue in the County Government of Machakos. The study was underpinned by the Resource-Based View and Benefit Theory of Taxation A descriptive research design was employed. The study targeted 110 respondents, comprising 105 sub-county revenue staff and 5 senior officers from the finance and planning departments, using purposive sampling. The data analysis utilized descriptive statistics and multiple regression to assess the strength and direction of effects. Diagnostic tests conducted included tests for normality, multicollinearity, heteroscedasticity, and autocorrelation. The findings revealed that revenue diversification had a statistically significant positive effect on OSR growth (β = 0.385, p = 0.029), implying that expanding revenue sources enhances fiscal inflows. Revenue digitization strategies were found to have a statistically significant positive effect (β = 0.481, p = 0.011), indicating the usefulness of technology in improving compliance and efficiency. Based on these findings, the study concludes that revenue diversification and digitization are effective levers for improving OSR performance. It is recommended that the County Government of Machakos adopt a comprehensive strategy that maps untapped revenue areas and digitizes the entire revenue value chain.
