City Hall devises ways to improve revenue collection

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The Nairobi county government will next week start reviewing its key revenue streams as it trains its eyes on the Sh17 billion revenue target.

Enforcement has been cited as one of the major impediments to revenue collection but this will soon be a thing of the past.

Own revenue sources form 80% of the 10 major revenue streams in Nairobi.

Finance executive member Pauline Kahiga says the review and aggressive revenue collection model will be adopted to ensure improved collection before the end of the FY2019/20.

“We have to hit optimum levels and improve on our potential and this is why we are going to review and mount sustained enforcement on the eight key streams of revenue for the county,” said Kahiga.

The county collected Sh10.25 billion in the FY2018/19, up from Sh 10.11 in the FY2017/18 recording an increase of Sh139 million.

The County executive members including CECs, chief officers and head of departments, agreed on this decision at the ongoing meeting focusing on the budget guidelines for the 2020/21 FY, the implementation of the 2019/20 budget and the supplementary budget.

The discussions anchored on revenue collection, budget absorption rate and improved service delivery to residents.

Chief officer for economic planning Washington Makodingo said that the county will launch a major crackdown on land rate defaulters next week in an exercise that targets over Sh500 billion.

A review of the land valuation roll will also be effected immediately in a move that could double the collections.

‘’The land rates form the biggest own source revenue stream but we are missing a lot from this sector because of outdated charges that need to be reviewed,” Makodingo said.

A recent assessment by the Commission on Revenue Allocation (CRA) has blamed the slow growth in revenue collection on CRA and underperformance in collections from land rates.

This is despite the fact that investors are making huge profits in property prices.

The reports indicates that City Hall can collect up to Sh77.91 billion if it reviews its valuation roll upwards.

The county currently charges property owners land rates based on 25 percent of the unimproved site value as per the 1980 valuation roll.

Other areas targeted for improved revenue collection include markets, parking fees and full enforcement of charges and fees outlined in the finance bill.

In markets, the county is considering hiring more revenue officers that will monitor daily collections from all markets. 

The County is targeting an extra Sh400 million from the sector.

The Nairobi County Assembly Budget and Appropriations Committee chairman Robert Mbatia said he is looking forward to seeing how the new measures will drive the revenue agenda.

He blamed the low collections in the fiscal year 2017/18 on the political turmoil in the country that affected businesses, and poor enforcement.

Environment executive Vesca Kagongo revealed that the county executive is working hard to improve its absorption rate in development budget from 78.2 % to over 90% in the current financial year.

“We will focus on implementing projects that are captured in the Annual Development Plan as proposed by every sector so that we don’t lose focus on what we want to attain,” Kangogo said.

She said the county will invest more in public participation forums in the budget making and implementation process.

“We have always remained committed to ensuring that the budget making process in Nairobi is people-driven and reflective of the needs of each and every of our residents,” she said.

She said that the delay in implementation of the current budget was occasioned by the long standoff between the Senate and the National Assembly on the Division of Revenue Bill.

Mbatia said the executive has done 78 per cent of the issues they intended to do.

He however said challenges of enforcement still linger but measures are being put in place to ensure it goes up to 100 per cent.

“The first year was a political year so many people were closing stock and nothing much could be collected,” said Mbatia.

He said the old JamboPay system also had loopholes that were being used to fleece the county of its funds.

“This time they have promised us that they will hit their target of Sh17 billion,” said Mbatia.

Other county assembly MCAs committee chairs and their vices also attended the forum.

They include Fred Okey (environment), Patrick Karani (budget), Michael Ogada, Emily Oduor, James Kiriba, Osman Adow, Joseph Komu and Susan Makungu.

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