The Nairobi county assembly has formed a panel to investigate own source revenue collection amid complaints of underperformance despite huge potential.
The motion says the ad hoc team will have 13 MCAs and has 60 days to report back to the house.
It will investigate why revenue collection levels have never been standard, the loopholes exploited by unscrupulous actors to siphon the funds to own pockets, and recommend the appropriate corrective measures.
“…the County Assembly resolves to establish an Ad-Hoc Committee comprising of thirteen Hon. members to inquire into the revenue collection system adopted by the County Government and report to the Assembly within sixty days after the adoption of this Motion,” it reads.
The terms of reference for the team include to probe the “reasons why local revenues have been declining; the nature, strengths and weaknesses of the revenue collection system(s) currently being used by the County Government; and propose legal, policy and administrative interventions on improvement of local revenue collection.”
Majority leader Peter Imwatok said the probe by the team was justified because the city boasts several lucrative revenue streams was still grossly underperforming compared to expenditure.
“Nairobi City County boasts several revenue streams yet there has been gross underperformance as regards the county’s annual revenue collection vis a vis its annual county expenditure,” he said while moving the motion.
He said “an effective revenue collection system is one of the foundations needed to buttress sustainable economic growth” and “that underperformance in revenue collection by the county is attributed to challenges in collection and administration of revenue.”
Attempts to improve revenue collection have seen the devolved administration adopt various strategies including automated revenue collection systems such as JamboPay, Noveta, the Nairobi revenue system by the Kenya Revenue Authority, Nairobi Pay System and the recent establishment of the Nairobi Revenue Authority.
But the lawmakers complain that despite the adoption of those strategies, the county’s internal revenues have continued to decline.
They are concerned that “failure to properly manage local revenue collection could lead to the county government failing to fund its recurrent and development programmes since relying on the national equitable share is currently unsustainable.”
City Hall announced it had posted 17 per cent growth in internally generated revenues to Sh4.5 billion in the third quarter of the financial year ended in June 2023.
The high collection saw Sh1.42 billion, Sh1.3 billion and Sh1.78 billion collected in January, February and March.
The numbers announced by the Governor Johnson Sakaja administration represented a rise in the streams compared to Sh1.39 billion in January, Sh0.99 billion in February and Sh1.45 billion in March of 2022.
The main sources of the rise in the revenue collected were land rates that recorded Sh1.87 billion in the three months, an increase of Sh477.6 million from the last fiscal year, while single business permits posted Sh942.7 million compared to Sh809 million in the previous financial year.
The county collected Sh8.97 billion for the entire 2021-22 financial year compared to the last quarter of the year ended 2023.