Nairobi county once again is aiming to achieve an ambitious Sh19.8 billion own-source revenue in the next Financial Year 2021-22.
This is part of the Sh37.3 billion proposed budget for financial year 2021-22 as highlighted in the County Fiscal Strategy Paper.
According to the county treasury, the 2021-22 projection of Sh37.3 billion budget will be funded by own source revenue of Sh19.8 billion and Sh17.3 billion from external sources.
“The revenue targets in the county have characteristically remained high, with a notable deficit being experienced since the start of county government. This has translated into severe cash flow crunches and accumulation of pending bills over time,” reads the CFSP
The six key own source revenue streams for Nairobi county include parking fees, rates, single business permit, house rents, building permits and, billboards and adverts accounting to close to 80 per cent of the county’s annual own-source revenue.
For next year, City Hall has set a target for rates at Sh7.62 billion, single business permit Sh2.75 billion, parking fees Sh3.02 billion, building permits Sh1.5 billion, billboard and adverts Sh1.2 billion.
Others include markets Sh674 million, fire services Sh453 million, house rents Sh606 million, food handlers certificate Sh250 million, liquor licenses Sh250 million, other income Sh1.48 billion.
Nairobi has been falling short of its revenue target since it came into existence in 2013 despite the digitisation of 136 of its revenue streams.
This has been blamed on unreliable rates, low collection from single business permits and inefficient collection of parking fees.
The highest amount ever collected was Sh11.71 billion in 2015-16 which was still short of the Sh15.3 billion target.
The lowest was collected last year, 2019-20 at Sh8.5 billion which was half the targeted Sh17.31 billion.
Rates was Sh1.89 billion against a target of Sh3.92 billion, single business permit Sh1.58 billion against Sh2.89 billion and parking fees Sh1.54 billion against Sh2.76 billion.
Building permits Sh457 million was collected against Sh2.1 billion target, billboard and adverts Sh754 million against Sh1.42billion while markets Sh295 million was collected against Sh598 million.
For fire services Sh218 million was collected against Sh458 million target, house rents Sh495 million against Sh615 million, food handlers certificate Sh128 million against Sh300 million and liquor licenses Sh179/million against Sh289 million.
Other incomes of Sh993 million was collected against Sh1.78 billion target.
The underperformance was largely attributed to the Covid-19 pandemic, which resulted in reduced activities both by the government and the public.
County executive for Finance Allan Igambi highlighted that the second half of the financial year was largely characterised by reduced movement due to cessation and staff working from home as a result of the advisory to combat Covid-19.
It is also necessary to note that revenue peaks in the second and third quarters.
This notwithstanding, the Kenya Revenue Authority consistently improved revenue collection on a month-to-month basis.
KRA was appointed the principal county revenue collector on March 16 last year as part of the agreement in the Deed of Transfer of functions of the county to the National Government.
The taxman was tasked with improving the county revenue collection.
-Edited by Sarah Kanyara