The Kenya Revenue Authority is rooting for the deployment of an integrated county revenue management system to seal leakages costing the counties billions of shillings.
KRA Commissioner General Humphrey Wattanga told the Senate ICT committee how the devolved units are losing revenue.
“The adoption of a single ICRMS across the counties will help enhance own source revenue at the counties as well as provide additional benefits to the two levels of government,” he said.
The committee chaired by TransNzoia Senator Allan Chesang, is inquiring into the effectiveness of the revenue system deployed by counties.
Currently, counties use disjointed systems, with some contracting financial technology firms to automate and collect revenue on their behalf.
Senators are pushing for Auditor General Nancy Gathungu to audit external revenue collection firms, following concerns over accuracy of revenue figures they declare.
The development came after the lawmakers raised concerns over the lack of auditing of the revenue service providers, saying the gap has opened a loophole where the companies siphon billions of shillings from the devolved units.
Wattanga said the private systems used by the counties have inherent challenges that work to the disadvantage of the counties in revenue collection.
“The systems experience frequent, prolonged and abrupt system downtimes, which cause disruption in revenue collection operations and inconveniences to county customers,” he said.
However, the senators questioned whether counties should take KRA seriously given it has failed to realise its revenue target in recent years.
“Do you think counties should take you seriously? You have come up with very good revenue recommendations even though you are not meeting your targets,” Nandi Senator Samson Cherargei said.
Lack of a standardised revenue administration and collection processes across the counties due to deployment of different vendors is also hurting revenue collection in counties.
KRA said procurement of the systems also comes with several challenges to the county governments such as unclear system requirements and vendor-led contracting processes.
“Additionally, vendors usually charge a percentage of revenue collected which in some cases is unreasonably high,” he said.
Some counties have yet to automate the systems and are collecting revenue manually.
Wattanga said most counties are using outdated systems used by the defunct local authorities.
The commission cited the Local Authority Integrated Financial Operations Management System.
“The system operates independently and is based on outdated technology, resulting in an architecture that is incompatible with other systems,” Wattanga said.
Consequently, the system is untenable, insecure, on-Sc ultimately unreliable.
