City Hall misses revenue target by Sh6.6b despite KRA takeover

City Hall building in Nairobi's CBD.

City Hall missed revenue target for the year ended June 30, 2021 by Sh6.6 billion despite bringing on board the Kenya Revenue Authority (KRA) as its principal collection agent.

The Nairobi County Revenue and Expenditure report also noted dismal performance in own-source revenue collections.

According to the report tabled before the assembly, City Hall collected Sh9.9 billion in the 2020/2021 financial year against a revenue target of Sh16.5 billion. Despite the overall collections being a Sh1.4 billion improvement from the previous financial year, the county was shy of the target.

“The underperformance is largely due to Covid-19 that has slowed down the economy translating to reduced business activity as customers adopt a wait and see attitude. The underperformance is expected to have a negative effect on the overall spending of all county government entities,” reads the report in part.

On own source revenue collections, rates amounted to Sh2.76 billion, single business permits Sh1.6 billion, parking fees Sh1.51 billion, billboards and adverts Sh736.3 million, building permits Sh713.1 million, Housing rents –Eastlands &EOTE Sh584.2 million, Liquor incomes Sh279.4 million, fire inspection certificates Sh211.1 million, Wakulima market Sh159.9 million and Regularisation of building/change Sh123.2 million.

Revenue collection from other markets was Sh166.7 million while other incomes amounted to Sh940.1 million.

The county treasury promised a raft of strategies to improve revenue collection following a tripartite meeting with the Nairobi Metropolitan Service (NMS) and KRA, which centred on revenue mobilisation.

“To spur revenue growth we agreed that there’s need to fast-track valuation roll implementation, leverage on information technology, legislative reforms to support revenue growth, update the customer database and enhance enforcement mechanism,” said Finance CEC Allan Igambi.

Mr Igambi proposed a review of the business processes to improve the internal control systems of revenue collection and institute human resource reforms to address challenges related to revenue collection staff.

This comes against the backdrop of demands by City MCAs that revenue collection be reverted to City Hall over the dismal performance by KRA.

The ward reps argued 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 earlier said revenue collection has dipped.

Utawala MCA Patrick Karani, also a member of the Budget Committee said: “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.”

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