Improve or go, Nairobi MCAs tell KRA on income

 

Nairobi ward reps want City Hall allowed to reclaim local taxes after losing the revenue collection function to the national government.

The MCAs have accused the Kenya Revenue Authority (KRA) of failing to improve on the county’s own-source revenues since taking over as the principal collector for the capital city in March last year.

Minority Leader Michael Ogada, who is also the Budget and Appropriations Committee vice-chairman, said there has not been any change since KRA took over. “In fact, the revenue collection has dipped”.

“Every day we see vehicles in CBD being clamped left, right and centre by KRA officers yet they cannot even collect Sh10 billion. KRA is doing even worse than what was there before. If the officers are not competent and up to the task, they should pack and go,” said Mr Ogada.

In the financial year ended June 30, 2020, the county collected Sh8.53 billion against a target of Sh17.31 billion.

Revenue target

In the current financial year ending tomorrow, the taxman missed City Hall’s revenue target for the third quarter by a whopping Sh2.5 billion after netting only Sh4.1 billion between January and March 2021 against a target of Sh6.6 billion.

This is a pale shadow of its predecessors — Jambo Pay, between 2014 and 2019, and the National Bank in 2019/2020 where the collection was above Sh10 billion.

This is despite the taxman charging the highest percentage for the county government’s revenue. KRA charges 4.5 per cent as fee for the total revenue collected compared to National Bank’s 3.8 per cent and Jambo Pay’s 3.25 per cent. City Hall has been averaging annual own source revenue collection of upwards of Sh10 billion; with the highest revenue collected in a financial year being Sh11.71 billion in the year ended June 30, 2016.

A May 2021 report by the Commission of Revenue Allocation said City Hall has the potential of collecting Sh77 billion.

Seal existing loopholes

Utawala MCA Patrick Karani, a member of the Budget committee, revealed that as of May 31, 2021; KRA’s collection was still below Sh9 billion; with only a month to the end of the current financial year. “There is no way KRA can reach the Sh10 billion mark. What we are saying is that KRA should just pack and go if it cannot give us a solution to better our collections.”

Mr Karani, said the poor performance is as a result of the taxman failing to seal existing loopholes that have led to declining revenue. “It is either KRA has failed to seal revenue leakages or they are both clueless and taking advantage of the situation.”

“We are calling upon the governor and the Finance executive to move with urgency to implement the Nairobi City County Revenue Administration Act, 2019 that proposes we set up our own ‘taxman’ to collect our own revenue,” he added.     BY DAILY NATION