LONG WAY TO GO

KRA raises Nairobi own-source revenue by Sh1.3bn

KRA collected Sh9.7bn in the last financial year compared to Sh8.5bn in 2019-20.

In Summary

• Building permits topped streams with increased collections hitting  Sh713.1 million compared with Sh456.7 million in the previous year.

• Nairobi has never met revenue targets. Collection turned over to KRA when key functions transferred to national government.  

Kenya Revenue Authority headquarter at Times Towers.
KRA HEADQUARTERS: Kenya Revenue Authority headquarter at Times Towers.
Image: FILE

Nairobi's own-source revenue collection has picked up by Sh1.3 billion, thanks largely to the Kenya Revenue Authority that has taken over the job.

For years, since 2013, the capital city has not met its own-source revenue targets from now 136 revenue streams, and it still has a way to go.

Covid-19 has held back collections in Nairobi, the epicentre of the pandemic. 

However, cumulatively own-source revenue improved by Sh1.3 billion. KRA collected Sh9.9 billion, compared with Sh8.6 billion in FY 2019-20.

The full's year collection was Sh9.7 billion against a target of Sh16.5 billion.

Nairobi county improved its revenue collection by Sh1.2 billion compared to Sh8.5 billion in FY 2019-20.

The figures are contained in the County Revenue and Expenditure Report as of June 30 this year. It was tabled in the county assembly last week.

It was the first full year that KRA was in charge of collection following the deed of transfer agreement. Key city functions were transferred to Nairobi Metropolitan Services to improve operations.

Parking, billboards and adverts were the worst-performing own-source revenue streams in the last financial year, 2020-21.

Billboards only yielded Sh736.3 million, a decrease compared with Sh753.9 million collected in FY 2019-20.

Parking yielded Sh1.52 billion, a slight decrease from Sh1.87 billion collected in the previous financial year.

“The underperformance is largely due to Covid-19 effects that have slowed the economy, translating to reduced business activity as customers adopt a wait-and-see attitude,” the report said.

The report by finance executive Allan Igambi revealed revenue collected from rates increased from Sh1.87 billion in FY 2019-2020 to Sh2.77 billion.

Single business permit collections increased to Sh1.6 billion from Sh1.5 billion in 2019-20.

Building permits topped revenue streams to hit Sh713.1 million compared with Sh456.7 million in the previous year.

But the Architectural Association of Kenya last week warned that City Hall could be losing billions of shillings in revenue due to what it called a faulty electronic construction permitting system.

AAK President Wilson Mugambi said the e-system was meant to enhance efficiency and transparency but instead was making it difficult for people to apply.

Building owners get approval of applications for building plans and construction permits through the Quick Response code system. It is part of the e-construction permit platform.

In May, Nairobi Metropolitan Service suspended the e-construction system after it was hacked. It was restored last month.

Eighteen illegal buildings were in the system when it was hacked, the revenue report said

KRA was officially appointed the principal county revenue collector on March 16, 2020, as part of the transfer of functions to the national government.

The taxman was tasked with improving revenue collection. 

KRA took over from JamboPay, which City Hall had contracted in 2014 to collect revenue.

The Sh8.5 billion own-revenue collection in FY 2019-20 was half the targeted Sh17.31 billion.

The reduction was partly due to Covid-19 after businesses were curtailed or closed since March last year. A night curfew was declared; there were stay-at-home directives and cessation of movement in and out of the county for a while.

The 2018-19 financial year was no better as revenue was Sh10.17 billion, Sh5 billion off the target of Sh15.29 billion.

In 2017-18, Sh10.17 billion was collected against a target of Sh17.23 billion. City Hall aimed to raise Sh19.57 billion in 2016-17 but only collected Sh10.93 billion.

The highest amount ever collected was Sh11.71 billion in 2015-16, which was still short of the Sh15.3 billion target.

In 2014-15, Sh11.6 billion was collected against a revised budget of Sh13.2 billion. In 2013-14,Sh9.33 billion was realised against a target of Sh12.13 billion.

(Edited by V. Graham)