Nairobi to increase levies, boost revenue collection

The county projects to collect Sh17.5 billion in its Sh36.7 billion budget for the 2022-2023 FY

In Summary
  • Matatu operators will pay between Sh1,650 and Sh3,000 more, depending on when they make their payments for monthly seasonal tickets.
  • 42-seater PSVs will pay between Sh1,630 and Sh4,350 more while buses with 62 seats will pay between Sh2,200 and Sh5,000 more.
Nairobi's Central Business District.
DISMAL COLLECTION: Nairobi's Central Business District.

Nairobi will implement new levies as county seeks to collect Sh17.5 billion to finance its Sh36.7 billion 2022-2023 budget.

This is according to the Nairobi City County Fiscal Strategy Paper 2022.

In the new measures, City Hall will resume the official parking rates for monthly seasonal tickets for public vehicles. This follows the resumption of full carrying capacity after ease of Covid-19 restrictions last year.

Matatus in the city had been paying discounted rates after the order to halve their carrying capacity as part of measures to contain the spread of the virus.

For the ticket, 14-seater PSVs have been paying Sh2,000, 42-seater minibuses Sh3,650, and Sh5,000 for the 62-seater buses.

In the reviewed rates, 14-seater matatus will pay a seasonal parking fee of Sh5,000 between the 6th and 24th of every month. But, if paid between the 25th and 5th, the fee will be Sh3,650.

This means that the matatu operators will pay between Sh1,650 and Sh3,000 more, depending on when they make the payment.

PSVs with 42 seats will pay Sh5,280 a month between 25th and 5th and Sh8,000 when paid between 6th and 24th. The increase is Sh1,630 and Sh4,350, respectively.

Buses with 62 seats will pay Sh7,200 between 25th and 5th of every month, and Sh10,000 when paid between 6th and 24th. The increase for bus operators is Sh2,200 and Sh5,000, respectively.

According to revenue data by City Hall, the county collects at least Sh100.6 million every month from seasonal parking fees with 1,024 slots available for the PSVs.

The county government will also follow up on compliance for vehicles terminating outside the CBD and on all vehicles registered in saccos,” the paper reads.

City Hall also intends to follow up on land defaulters and enforce new land rates with an aim to collect Sh5.1 billion.

The GIS based valuation roll with the current land values will replace the old one done from 1982.

As part of a raft of new levies contained in the Nairobi City Finance Bill, 2021, land rates will be charged at 0.115 per cent of current property value, setting the stage for costly levies for property owners in the capital.

Currently, property owners pay land rates at 25 per cent of the unimproved site value based on the 1980 valuation roll. City Hall says the current rates deny it additional revenue from asset appreciation.

However, if the Finance Bill is passed by the county assembly, property owners in Nairobi will soon pay as high as double the current land rates. 

The county will however, consider granting waiver on interest and penalties to enhance compliance.

City Hall also targets to collect Sh2.8 billion from single business permits by enhancing inspection in all subcounties. The inspection aims to increase the number of businesses in their data base from the current 188,000 to at least 300,000.

''There will be continuous inspections and enforcement on compliance following the reopening of business after the effect of Covid-19,” reads the document.

City Hall aims to collect Sh1.2 billion from outdoor advertising and billboards. The county government seeks to enhance surveillance in all sites following increased activities after ease of Covid-19 measures.

Other measures will include follow up on advertisers arrears and enforcement on non-compliant companies.

The entity also seeks to collect Sh1.8 billion from building permits and approvals.

It plans to ensure that the e-constructions system used for the application of building plans and construction permits is fully operational at all times.

Last year, the Nairobi Metropolitan Service suspended the e-construction system for a few months after it was hacked.

During this period and without disclosing the buildings, types and locations, about 18 illegal buildings were interfered with when the system was hacked.

Nairobi has however continued to fail to meet its own source revenue targets since 2014 despite being the country's business hub.

The poor performance has been consistently recorded since record revenue collection in 2016, which was still bellow the target.

The Sh11.72 billion own source revenue recorded in the financial year ending June 30, 2016 remains the highest revenue collected by the county since the advent of devolved units in 2013.

However, it is projected that Sh17.5 billion will be collected from own source revenue and Sh19.2 billion from external revenue for its Sh36.7 billion 2022-2023 budget.

"Thus internal revenue will constitute 47.7 per cent of total revenue, while external revenue generates approximately 52.3 per cent,” the Nairobi City County Fiscal Strategy Paper 2022 reads.

However, the internal revenue projection for the year ending June 30, 2023 represents a decrease of 10.7 per cent from Sh19.6 billion approved in the current year.

(Edited by Bilha Makokha)