Title: Revenue Penalties and Revenue Collection Performance of County Governments in Kenya
Authors: Joy Gacheri Kithinji, Willy Muturi, Patrick Kibati
Volume: 10
Issue: 5
Pages: 121-127
Publication Date: 2026/05/28
Abstract:
County governments in Kenya continue to experience challenges in achieving optimal own-source revenue collection despite the adoption of various revenue mobilization measures aimed at enhancing compliance and improving fiscal sustainability. Among the commonly used enforcement mechanisms are revenue penalties imposed on taxpayers for delayed payment and non-compliance. However, the effectiveness of these penalties in improving revenue collection performance among county governments remains unclear. This study therefore sought to establish the effect of revenue penalties on revenue collection performance of county governments in Kenya. The study was anchored on Deterrence Theory. A positivist research philosophy and descriptive research design were adopted. The study targeted all the 47 county governments in Kenya and employed a census approach. Secondary data were collected from annual audited financial statements, Controller of Budget reports, and county government reports for the financial years 2014/2015 to 2024/2025. Data were analyzed using descriptive and inferential statistics with the aid of GRETL econometric software. Panel regression analysis was used to determine the effect of revenue penalties on revenue collection performance. The findings revealed that revenue penalties had a positive but statistically insignificant effect on revenue collection performance among county governments in Kenya (? = 0.086, p = 0.169). The study concluded that penalties alone are not sufficient in enhancing revenue collection performance and that excessive reliance on punitive measures may not effectively promote compliance. The study recommends that county governments should adopt a balanced approach that combines fair enforcement mechanisms with taxpayer education, improved service delivery, and transparent revenue administration practices to enhance voluntary compliance and improve revenue collection performance.