• Whereas Nairobi has the potential of collecting Sh77 billion, the county has managed only Sh11.7 billion in its highest collection.
• Under the deed of transfer, several officers were seconded by the national government to KRA to collect county revenue.
Image: FREDERICK OMONDI
Nairobi has been falling short of its revenue target since 2013, despite the digitisation of 136 of its collection streams.
In May, a report by the Commission on Revenue Allocation revealed all counties raised less than 40 per cent of their estimated revenue potential, except those with game reserves.
CRA flagged Nairobi’s collections, saying despite the potential to finance 40 per cent of its budget, its own-source revenue increased by less than one per cent.
Whereas Nairobi has the capacity to collect Sh77 billion, it has only reached a high of Sh11.71 billion. This was in 2015-16. The sum was still short of the Sh15.3 billion target.
The lowest was collected in 2019-20 at Sh8.5 billion, which was half the targeted Sh17.31 billion. This was mostly attributed to the economic fallout of Covid as many businesses suffered.
To invigorate collection, the Nairobi Metropolitan Services, Kenya Revenue Authorities and the Nairobi government are now banking on a new revenue system.
The Nairobi Revenue System (NRS) is said to be a system that can withstand the test of time and is tamperproof, thus giving residents reliable access to services.
Residents will from December pay for county services using a new digital platform that will replace the Local Authority Integrated Financial Management System (Laifoms) that has been in existence since 2014.
To access parking services, county housing rentals, business process, fire services, payment of market fees, land rates, public health certification, development control, social service and other permits, and all new applications must be processed through NRS.
While launching the system last Friday, NMS director general Mohammed Badi noted that the existing data to support delivery and revenue collection was wanting, thus there was a great need to immediately develop a system to end the drastic decline in revenue.
“The existing data is incomplete, outdated and in some cases lack data integrity and at times not available. This has created service delivery gaps to the citizens and further fuel in the shortfall of revenue collection,” he explained.
One can access the NRS through the website nairobirevenueservices.go.ke or the shortcode USSD *647#.
The three entities are said to have worked for the past year to develop the system, which is currently being rolled out in phases at a cost of Sh160 million.
According to Badi, all county business processes have been documented and customers registered under the new system.
“A total of Sh1.06 revenue collected to date through the new system that is being rolled out in phases,” he added.
In May, an inventory of county rental houses and tenants was conducted to collect rent arrears. Over the years, tenants have failed to pay rent, leading to a reduced collection. However, with the new system, it will be easy to track defaulters.
The health system is currently being updated into the NRS where all M-Pesa transactions being paid in county hospitals will also reflect in the new system.
“M-Pesa is a transparent mode of payment and being part of the new system, KRA will be able to monitor the payments. No money will be lost,” Badi said.
KRA commissioner Mburu Githii said the taxman has ensured that through NRS, Nairobi has a credible revenue system.
"As KRA, we have also ensured that Nairobi has credible data that can be used to determine who owns properties and who does business," he said.
The commissioner further noted that KRA has ensured an accountable workforce subjected to a credible performance and framework that boost revenue collection.
Mburu said the new system will address the challenge of having multiple revenue systems that are disjointed.
KRA was officially appointed the principal county revenue collector on March 16 last year as part of the agreement in the deed of transfer of functions of the county to the national government.
Under the deed of transfer, several officers were also seconded by the national government to KRA to collect county revenue.
Collection improved by Sh1.2 billion in the last financial year, despite the Covid-19 crisis.
Sh9.7 billion was collected, being the first full year with KRA in charge. Sh8.5 billion was collected in 2019-20.