Nairobi county revenue up 25% after KRA takeover

Kenya Revenue Authority managed to collect more despite Covid-19 restrictions that greatly hurt businesses

In Summary

•Analysis shows improved revenue collection on a month-to-month basis since KRA took over in March 2020.


The Kenya Revenue Authority headquarters
The Kenya Revenue Authority headquarters
Image: FILE

The Nairobi county revenue collection has improved by 25 per cent to Sh3.9 billion over the last six months, thanks to Kenya Revenue Authority.

The county collected Sh3.1 billion over a similar period last year before KRA took over the revenue collection role.

"The improvement can be attributed to the new collecting agency," county assembly Finance, Budget and Appropriations Committee chairman Robert Mbatia said.

According to the monthly revenue analysis data seen by the Star, KRA collected Sh466.6 million in July, Sh454.9 million in August, Sh604.7 million in September, Sh1.05 billion in October, Sh502.5 million in November and Sh842.8 million in December.

Revenue collection improved in most months compared to the previous year.

In the 2019-20 financial year, Sh485.5 million was collected in July, Sh413.7 million in  August, Sh600.7 million in September, Sh407.4 million in October, Sh428.5 million in November and Sh808.6 million in December.

Despite the improvement, the county failed to meet its monthly targets except for October when Sh1,052,192,437 was collected against a target of Sh1,039,658,080.

The county had targeted to collect Sh905.2 million in July, Sh909.7 million in August, Sh979.7 million in September, Sh1.04 billion in October, Sh1.1 billion in November and Sh1.4 billion in December 2020. 

Finance, Budget and Appropriations Committee chairman Robert Mbatia at City Hall
Finance, Budget and Appropriations Committee chairman Robert Mbatia at City Hall

Rates generated Sh1.1 billion against a target of Sh1.2 billion. That was the highest collection made from own source revenues.

Parking fees generated Sh685.3 million, single business permit Sh470.3million, building permit Sh321.6 million, billboards and advertisement Sh291.3 million, Rent Sh292.9 million, fire inspection certificates Sh54.9million, food handlers certificates Sh50 million and Wakulima market Sh80.8 million.

Another Sh101.1 million was collected from others markets with Sh60.8 million from the regulation of building. Other incomes generated Sh433.1 million.

Mbatia told the Star on Tuesday that KRA encountered challenges in collecting the revenue.

He said the authority cited weak legislation leading to failure to attain targets.

"As the assembly, we have been complaining of the same issues whereby we have acts that have never been implemented and gazetted. These have resulted in the poor performance of the streams," Mbatia said.

He said some of the staff seconded to KRA were not revenue collectors, raising queries on officers who were in charge of revenue at City Hall.

The MCA condemned the contradicting revenue collecting messages from City Hall that confused the public on how to pay.

"NMS introduced the new USSD code *647# to replace *235#. But City Hall continued to run adverts using the old code resulting in loss of revenue,"

He also faulted a misleading waiver announcement that caused many not to pay their arrears.

KRA was officially appointed the principal county revenue collector on March 16 2020 as part of the agreement in the Deed of Transfer of functions of the county to the national government.

The taxman was tasked with improving collection. Since the advent of devolution, City Hall has hardly collected Sh10 billion annually.

The devolved unit had in 2014 contracted JamboPay to collect revenue on its behalf, but the contract was terminated in June last year.

Since the takeover in March, KRA has consistently improved revenue collection on a month-to-month basis.

Between March and June 30, 2020, revenue collection was 33 per cent higher than for the same period in the previous year.

The Covid-19 pandemic disrupted business and greatly contributed to the failure to meet targets.

Measures put in place to curb the spread of the contagion such as night curfew, cessation of movement and stay at home directives disrupted business.

Controller of Budget reports show that Nairobi's annual revenue collection has been declining annually. City Hall has never met its revenue targets since 2013.

At the same time, the Controller of Budget said the county did not spend any cash in the first three months of 2020-21 financial year.

This was despite the county having an annual budget of Sh31.4 billion with only Sh6.4 billion allocated for development.


Edited by P.O