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Kenya: City Hall Eyes More Revenue, to Expand Tax Net
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The Nairobi county government will institute legal action against business owners who fail to pay levies, in a move aimed at improving income.
The redress will be preceded by demand for unconditional payment of outstanding arrears.
The County’s Finance and Economic boss Allan Igambi also says his team will mount continuous inspections and enforcement to ensure compliance.
Further, the county government will ensure prompt billing as well as create public awareness on all county levies for residents to know how much to pay, how to pay, deadlines, and consequences of being in default.
“To achieve this, we shall provide the necessary tools to facilitate the collection, inspection, and enforcement of revenue collection,” said Igambi.
He also explained that City Hall seeks to raise Sh19.8 billion as internal revenue in the financial year ending June 30, 2022 to fund its Sh39.6 billion budget.
City Hall has been experiencing dwindling own source revenue returns from its 136 revenue streams that consistently fail to hit its revenue targets.
The county government realized a paltry Sh8.53 billion against a target of Sh17.3 billion in the financial year ended June 30, 2020.
This represents a drop of close to Sh2 billion from the Sh10.17 billion recorded in the financial year ended June 30, 2019, against a target of Sh15.21 billion.
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As a result, the county government will introduce a set of new levies aimed at achieving its own source revenue target.
The city-county government is also set to increase the number of rateable properties in the city from the current 161,000 to approximately 300,000 properties through the implementation of the Geographical Information System (GIS)-based valuation.
From the two initiatives, the county government is looking at netting an extra Sh3.2 billion to raise revenue from land rates from the current Sh2.8 billion to Sh6 billion.
Further, Igambi said, City Hall will increase the number of registered businesses from the current 188,000 to approximately 500,000 through the collection, updating, and cleansing data to have accurate data on single businesses in Nairobi.
The county currently charges Sh200 as a daily parking fee in Nairobi’s city centre where it realised Sh1.5 billion in the last financial year against a target of Sh2.8 billion.
City Hall is also banking on the implementation of the Nairobi City County Betting, Lotteries and Gaming Act,2021 which could net Sh2 billion.
According to the Act, all betting, lotteries, and gaming licensed under the new law will attract an entertainment tax chargeable at a rate of 20 percent on the gross winnings of all betting, lotteries, and gaming activities.
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