OVERHAUL

New revenue system Taifapay to be rolled out in July

KRA appointed principal revenue collection agent in deal to transfer county functions to national government

In Summary

• Old system Laifom lacked proper record keeping, which resulted in challenges such as being cumbersome, complex and not up to date. 

• As noted by KRA, there are no proper reconciliations between NBK and City Hall but the county will still manage the contract until NBK's five years are over.

KRA headquarters at the Times Towers.
TRANSFER OF FUNCTIONS: KRA headquarters at the Times Towers.
Image: FILE

With the task to improve Nairobi county’s revenue collection, the Kenya Revenue Authority will roll out a new system in the 2020-21 financial year.

The taxman will do away with the current Local Authority Integrated Financial Management System (Laifom) and introduce Taifapay.

As highlighted in the KRA takeover strategy document, Taifapay will be launched in July after completion of a massive system overhaul. Developed by the Ministry of Interior, the system will comprise a portal, back-office system and payment gateway.

KRA was officially appointed the principal agent for overall revenue collection for the county government and actualised on March 16.

This was part of the agreement in the transfer of functions of the county to the national government signed at State House on February 25 between Governor Mike Sonko and Devolution Cabinet Secretary Eugene Wamalwa.

JamboPay, which was contracted by City Hall from 2014 until June last year, was using the Laifom system.

The system was installed to address several concerns local authorities faced in service delivery.

However, it lacked proper record keeping, which resulted in challenges such as being cumbersome, complex and not up to date.

“Laifom has an outdated anti-virus, construction permit system is managed by a third party and an unstable data centre. The system is obsolete and not optimized,” the report reads.

After termination of JamboPay contract, the National Bank of Kenya was contracted for five years to collect.

 

The current system consists of three parts; Laifom - core systems for revenue collection and administration, NBK; portal and payment interfaces, mobile app, USSD and Construction - issuance of permits (standalone).

As noted by KRA, there are no proper reconciliations between NBK and City Hall but the county will still manage the contract until five years are over.

Since the takeover, KRA has migrated and secured Laifom data. At the moment, the authority is attempting to upgrade all upgradable applications and endpoints and engage Laifom developers to improve availability.

County Revenue Division (CRD)

In line with its new strategy, KRA has come up with the County Revenue Division unit that will oversee revenue collection.

Being under the supervision of KRA, the division will consist of officers from both the county and the authority. CRD will be in charge of enforcing the city’s revenue collection and compliance.

In its structure, CRD comprises the head of county revenue who will oversee implementation of the division’s revenue and compliance enhancement strategy, implement performance accountability framework and report revenue performance.

Under him will be the head of revenue who will be in charge of all revenue officers followed by the head of enforcement who will lead the enforcement officers.

The CRD was made public on March 17 in a gazette notice, ”KRA has already created the county revenue division, identified KRA and county officers to be seconded to the division,” the report reads.

New accounts

As part of its new strategy, the taxman has opened two new accounts - National Bank 01071225251100 and Cooperative Bank 01141709410000 which will be under its control. Funds will be collected and transferred to the County Revenue Fund (CRF) on a daily basis.

Initially, the county had four accounts; NBK 010602171997400 and the rest from Cooperative Bank 011412323966000 - main collection, 01141232396900 - liquor license which was managed by the Liquor Board, and 01141232396606 - garbage and waste disposal.

It is not clear whether these accounts have been closed.

Under the administration of Governor Sonko, City Hall has been operating on a cashless payment system.

Currently, there are 24 pay bill numbers in operation used for collections at various markets.

After the termination of JamboPay’s contract, the county introduced a USSD short code *235# through which the public made payments depending on the service.

All the pay bill numbers transfer funds collected to National Bank daily by midnight and are kept in the County Revenue Fund.

As highlighted in the KRA takeover strategy, Nairobi will be in charge of accounting, reporting and reconciliation.

Implementation will be done in consultation from both the county and national government.

An overall Implementation Coordination committee has been established and is chaired by the Devolution PS Charles Sunkuli.

The State Department for Devolution has already established three working groups; Finance, Human Resources and Sectors.

KRA has been placed in the Finance working group.

The county is said to have already appointed senior finance officers to work with the taxman.

KRA is expected to get unlimited access to information on processes, systems, information, data, documents and reports.

The authority will also be expected to enhance revenue by injecting efficiency to the current collection processes and systems. 

Edited by R.Wamochie