For the second time in as many years, Nairobi Governor Johnson Sakaja has announced that the revenue collection role has been reverted to the county government from the national government.
In a statement on Thursday, the county boss said that Nairobi residents seeking services from City Hall will be using new bank accounts effective August 1, 2024.
The governor said that City Hall has moved its revenue collection bank accounts from the Kenya Revenue Authority (KRA) to its own.
“This is to notify all our esteemed residents that from August 1, 2024, the county will fully transition from the previous KRA-denoted revenue collection bank accounts,” read the statement.
In 2022, just months after he took over office, Governor Sakaja, while meeting county workers, said KRA officials would no longer collect revenue, and that the duty would be carried out by officers under the ticketing department.
According to Mr Sakaja the reason at the time was informed by the fact that the taxman was not meeting the set targets previously attained by county officials.
In January, a fierce battle between the governor and ward reps over the city county’s revenue collection system, threatened to disrupt service delivery.
Members of the County Assembly (MCAs), charged with oversight over the county’s resources, questioned the performance of the Nairobi Revenue System (NRS) — the current tool used to collect taxes.
The MCAs wanted Mr Sakaja to scrap the system and introduce an entirely new one to boost revenue collection.
At the time, an adamant Sakaja insisted on retaining NRS, which was developed by the national government through KRA.
During the handover of county functions after the 2022 elections, the Nairobi Metropolitan Service (NMS), a national government entity that had been appointed to run the city county amid former Governor Mike Sonko’s tribulations, reverted revenue collection to City Hall.
But there was a big problem: Nairobi City County did not have its own revenue system because the end of the KRA's tenure meant the taxman would be leaving with the NRS.
In December 2023, City Hall’s chief cashier Shadrack Nyamai informed an ad-hoc committee on revenue collection that the county was still using a bank account opened by the KRA, with its officers still being signatories.
There is a push to return revenue collection to the previous service provider, Jambo Pay, amid parallel plans for the county to contract Safaricom to do the job.
Nyamai said KRA opened the accounts during the tenure of the NMS and that they were never deactivated after it (NMS) handed over functions to the county government in September 2022.
He said the accounts were still being used despite the transfer of deeds and that he had never received a reconciliation of closing the accounts.
At the same time, City Hall has reminded residents that it operates a no-cash policy in revenue collection.
Besides, City Hall also advised customers to make their payments through the Nairobi City County Government Revenue collection accounts above once they obtain their invoices.
In the last financial year, Nairobi City County marked a milestone as its own source revenue hit Sh12. 8 billion. But this was against a target of Sh20.06 billion, which was part of the Sh40.7 billion county budget.
According to data from City Hall, Sh12.8 billion is the highest achieved by the county since devolution started.
In the current FY 2024-2025, the county has a budget of Sh43.56 billion, with Governor Sakaja's administration aiming to collect Sh21.06 billion in own source revenue.
City Hall has consistently missed its revenue targets since its inception in 2013. The highest amount of own-source revenue collected was in 2015-2016 during the Kidero era. The county collected Sh11.7 billion against a target of Sh15.3 billion.
There have been reports of revenue diversion, with the EACC recently uncovering a parking scandal in which revenue officials manipulate the system to show that a customer has paid only to ask the client to transfer the money to the tax collectors’ personal bank accounts.
Dr Kidero also faced a serious challenge after investigators questioned a contract the county government signed with service provider WebTribe Ltd, the parent company of JamboPay.
Dr Kidero, who took office in 2013, kicked out another company, Hausraum Limited, to pave the way for JamboPay.
JamboPay was paid a 4.5 percent commission on revenue collected. Hausraum Ltd later went to court seeking Sh1.3 billion for breach of contract.
In 2019, shortly after former Nairobi governor Gideon Mbuvi Sonko took office, a bitter dispute with JamboPay resulted in the latter terminating its contract with the county government.
Mr Sonko later signed a revenue collection deal with the National Bank of Kenya before NMS took over in 2020.
