• KRA was appointed principal county revenue collector on March 16 last year under the Deed of Transfer of functions of the county to the national government.
• In December, residents will use a new digital platform to pay rent, land rates, business permits and make numerous other applications and payments.
Image: CHARLENE MALWA
Nairobi has once again missed its revenue target for the first quarter of the current financial year—by Sh1.6 billion.
From July to October, the Kenya Revenue Authority collected Sh1.37 billion against a target of Sh2.9 billion.
This was also a drop of Sh182 million when compared to Sh1.56 billion collected in the same period of the last financial year.
In July, the Commission on Revenue Allocation flagged the county’s collections, saying Nairobi has the potential of collecting Sh77 billion, but only managed Sh10.7 billion.
The system is overstretched, but starting in December, the new Nairobi Revenue System will be used for payment of fees, rents, land rates and numerous services. It is expected to greatly increase local revenue collection.
Assets are be revalued and county properties mapped for taxation.
The data is contained in the Quarter Revenue and expenditure report for 2021-22 tabled in the assembly on Tuesday by finance executive Allan Igambi.
Local revenue has declined since 2014 as revenue streams have underperformed, missing targets by big margins.
The resulting shortfall has resulted in frequent cash flow problems and the accumulation of pending bills.
KRA was appointed the principal county revenue collector on March 16 last year under the Deed of Transfer of county functions to the national government.
The taxman was tasked with improving collection. Since the advent of devolution, City Hall has hardly collected Sh10 billion annually.
However, the collection of own revenue sources for the first quarter, Sh172.2 million, was from land rates against a target of Sh435 million.
This was also a decline, as Sh287 million was collected for the same period in the last fiscal year.
The report also said parking fees failed to meet its target by almost half; Sh358.4 million was collected against a target of Sh683.3 million
On a positive note, KRA collected Sh106 million from single business permits, an increase from Sh93.5 million in the same period of the previous year.
But still, it missed its target of Sh390 million.
For building permits, the county only collected Sh141.9 million against a target of Sh375 million.
Building owners now get their applications of building plans and construction permits through the Quick Response code system, which is part of the e-construction permit platform.
In May, the Nairobi Metropolitan Services suspended the e-construction system after it was hacked but was restored last month.
During this period, 18 illegal buildings were approved. The types, locations and lost revenue were not disclosed.
KRA collected Sh185.5 million from billboards and advertisements against a target of Sh300 million.
Revenue from fire inspection certificates surpassed its target of Sh15.6 million; Sh19.7 million was collected.
Food handler certificates failed to reach their target of Sh62.5 million, revenue was only Sh31.4 million.
Markets in Nairobi generated Sh102.9 million against a target of Sh134.8 million.
Other revenue sources generated only Sh156.8 million against a Sh426.9 million target.
House and staff rent yielded only Sh99.3 million, against a target of Sh150 million.
In May, the Nairobi Metropolitan Services launched an inventory of county rental houses and their tenants, a move aimed at boosting revenue from the county revenue stream.
The inventory conducted with City Hall and KRA is scheduled to be concluded before the month-end.
In 2019, City Hall had 16,746 county-owned houses.
Over the years, tenants have failed to pay rent.
Since KRA took over last year, it has been put on the spot for ‘failing’ to reverse the trend of declining county revenue.
A group of MCAs has complained about the competency of the taxman, claiming KRA is not up to the task.
Nairobi budget committee chairman Robert Mbatia agreed Nairobi has the potential to collect Sh77 billion. The increase can be realised by introducing a new revenue system and revising the valuation roll, he said.
He attributed declining revenue collection to an overstretched revenue collection system, weak legislation, pilferage and lack of capacity to collect.
However, the taxman improved Nairobi’s collection by Sh1.2 billion for the financial year ending June 30, despite the Covid-19 pandemic period when Sh9.7 billion was collected.
As the first full year with KRA in charge of collection, revenue increased compared with Sh8.5 billion in FY 2019-20
However, the NMS, KRA and City Hall are now banking on a new revenue system to increase revenue.
The Nairobi Revenue System is said to be reliable, durable and tamperproof.
From December, Nairobi residents will start paying for county services through a new digital platform. It will replace the Local Authority Integrated Financial Management System (Laifoms) used since 2014.
NRS will process access to parking services, enable payment of rent, business permits, fire certificates.
It will also handle market fees, land rates, public health certification, development control, social control, social services and other permits.
All new applications must be handled through NRS.
(Edited by V. Graham)