City hall to target informal street-side trade, revamp digital collection to net Sh21 billion revenue

Nairobi County aims to expand its tax base and revenue by formalising informal street-side business and strengthening digital payment systems.

These efforts are intended to meet the county’s own-source revenue target of Sh21 billion for the 2025-26 financial year.

The strategy was outlined during a recent strategic workshop convened by the county’s Finance and Economic Affairs sector, bringing together sector heads, revenue administrators and county executives to align efforts to boost revenue collection.

Key to the plan is formalising informal enterprises such as the Maasai markets and roadside vendors, many operating outside the tax net. 

County officials said expanding the pool of registered businesses would increase compliance and reduce over-reliance on a limited number of existing taxpayers.

It is aimed at businesses that are not within the tax bracket, such as eateries, repair shops, salons, markets, and other overlooked, relatively high-value enterprises.

“We must grow our customer database,” Tiras Njoroge, the chief officer for Revenue Administration, said.

“That is the only way we can move away from relying on the same few compliant businesses.” Each ward and subcounty would be tasked with identifying and registering businesses within their jurisdiction. 

Revenue mobilisation will continue to be a key focus in delivering services and funding development projects.

Njoroge said the county would use data to prioritise “high-yield” revenue streams, applying the 80-20 principle, where 80 per cent of potential revenue is expected to come from 20 per cent of the revenue sources.

Each sector will be required to map out its key revenue areas and submit updated databases to the central revenue team.

The county is also expanding /use of digital payment platforms to streamline tax remittance and improve collection efficiency.

The NairobiPay platform will be enhanced and more payment points rolled out to facilitate easier access. County officials said digitalisation is expected to close leakages and ensure payments are traceable.

“We are not introducing new levies,” Njoroge said. “We are improving compliance through better systems and processes.”

Customer service centres have been launched in subcounties, including Umoja 1 in Embakasi West, Ruai and Dandora, to make it easier for residents to access services, including payment and registration.

The centres are equipped with digital tools and staffed by trained officers to handle queries and assist with transactions.

The workshop also addressed fiscal planning and budgeting. Finance executive Asha Abdi called for better alignment between expenditure plans and actual revenue performance.

She said the county could no longer afford to budget on the assumption of high revenue targets without the capacity to collect.

“In previous years, we have achieved only 50 to 60 per cent of our revenue targets,” Abdi said.

“This year, we must be realistic and base our plans on verifiable data and effective collection systems.”

In the 2024-25 financial year, Nairobi County collected Sh13.8 billion in own-source revenue, up from Sh12.8 billion in the previous year.

Despite the Sh1 billion improvement, collection still fell far short of the Sh20 billion target.

The county hopes improved compliance, expanded registration and digitalised payment infrastructure will enable it to close the gap and reach its Sh21 billion goal this year.

The workshop also highlighted the need for consistent enforcement to ensure registered businesses and property owners pay the required fees and taxes. 

County officers were urged to follow up on defaults, issue penalties and ensure enforcement is carried out uniformly across subcounties.

Officials said public awareness campaigns would accompany the registration drive to educate traders and residents about the benefits of formalisation and digital payment systems.

Sector departments will also be required to conduct quarterly reviews of their revenue performance and report back to the finance team.

The county also plans to issue updated revenue targets for each department based on the mapping and data collected during the registration. 

These targets will be used to monitor progress and adjust strategies during the financial year.