Why MCAs want City Hall to collect revenue, not KRA

City Hall building in Nairobi's CBD.

Nairobi County MCAs now want revenue collection reverted to City Hall over allegations of dismal performance by the Kenya Revenue Authority (KRA).

The ward reps argue that since taking over as the principal revenue collecting agent on behalf of City Hall, the taxman has been unable to increase collections.

Assembly Minority Leader and Budget committee vice chairperson Michael Ogada claimed revenue collection has dipped.

“KRA is doing worse than what was there before, we cannot close our eyes and pretend that we are okay. We are not saying they are not competent but they are not delivering which then becomes an issue. They have been unable to collect even Sh10 billion,” he said.

In the 2019/2020 financial year, City Hall collected Sh8.53 billion against a target of Sh17.31 billion.

In the 2020/2021 financial year, however, KRA only collected Sh4.1 billion for the third quarter between January and March, accounting for Sh2.5 billion shortfalls of the Sh6.6 billion target.

Moreover, figures in our possession indicate that prior to the takeover by the taxman, Jambo Pay, which was the principal revenue collector between 2014 and 2019, and the National Bank in 2019/2020 year, all made collections more than Sh10 billion.

Utawala MCA Patrick Karani, also a member of the Budget Committee, observed that as of May 31, KRA had only collected Sh9 billion with less than a month to the end of the financial year.

“KRA should pack and go. If they cannot give us a solution, then we are better off the way we were. The lowest revenue collected by former Governor Mike Sonko was Sh10.1 billion,” said Mr Karani.

“We cannot see what KRA is doing in Nairobi because it is actually underperforming. Their cost of revenue collection is also very high, far beyond what Jambo pay used to collect," he added.

He said Jambo Pay used to charge a commission of 2.5 per cent while National Bank 3.5 per cent but when KRA came on board they increased by 1.5 to 4.5 per cent.

He also claimed the taxman has been unable to seal revenue collection loopholes.

Karani consequently called on the deputy governor and the CEC Finance to implement the Nairobi Revenue Management Act which proposes that City Hall sets up an authority similar to KRA to collect revenue.

“They (KRA) should not blame Covid-19 for the decline. For parking, we should not see a decline in revenue because every time you come to town you find cars parked. I think KRA is not up to the task,” he said.

Kilimani MCA Moses Ogeto called for the operationalisation of a data centre launched by President Uhuru Kenyatta at City Hall and revert revenue collection to the county government.

“The county should implement its own data collection system better than that used by KRA. The president launched the data centre which is lying idle. It only takes the goodwill of the government to operationalise that data centre,” said Mr Ogeto.