Nairobi County cuts revenue target amid low collection

Nairobi County government has reviewed downwards its own-source revenue target for the current financial year by more than Sh2.6 billion in light of dismal revenue performance in the previous year.

The revised target for the financial year ending June 30, 2021 now stands at Sh14.65 billion, down from Sh17.32 billion the previous financial year.

City Hall in this financial year managed to collect Sh8.52 billion from the over 136 revenue streams at the county government, according to the Nairobi County Annual Development Plan for the year ending June 30, 2021.

Nairobi County revenue collection is currently being managed by the Kenya Revenue Authority after being appointed by City Hall.

In the 2018/2019 financial year, the county collected Sh10.2 billion.  The county government targets to collect Sh11.2 billion from the top five revenue streams including land rates, single business permits, parking fees, building permits and billboards and adverts.

This will be complemented by Sh3.45 billion from other remaining revenue streams.

“For land rates, City Hall targets to rake in Sh3.2 billion, another Sh2.5 billion from single business permits, Sh2.8 billion from parking fees, Sh1.5 billion from building permits and Sh1.2 billion from billboards and adverts,” reads in part the plan by Finance and Economic Planning executive Allan Igambi.

Collected Sh1.9 billion

In the financial year ended June 30, the county government collected Sh1.9 billion from land rates against a target of Sh3.9 billion. Single business permits raked in Sh1.6 billion against an annual target of Sh2.9 billion, parking fees brought in Sh1.5 billion for the county government against a target of Sh2.8 billion.

On the other hand, City Hall recorded a paltry Sh456 million from building permits against a target of Sh2.1 billion while billboards and adverts posted Sh754 million against a target of Sh1.4 billion. The remaining revenue streams gave the county government Sh2.4 billion.

Nairobi County has failed to meet its own-source revenue targets since 2014, with the performance taking a downward spiral since a high achievement of Sh11.7 billion in the financial year ended June 30, 2016 against a target of Sh15.3 billion.

In the financial year 2013/2014, the total revenue collected was Sh9.33 billion against a target of Sh12.13 billion.

Low performance

The low performance was due to unreliable rate records, low collections on single business permits and inefficient collection of parking fees.

In financial year 2014/2015, the revenue collected was Sh11.6 billion against Sh13.2 billion.

The shortfall in internal revenue was much lower at 14 per cent compared to the preceding year, when it stood at 23.1 per cent with delay in the passage of the Finance Act, 2013.

In the 2016/2017 financial year, City Hall raised Sh10.93 billion against a target of Sh19.57 billion.

The first financial year under Governor Mike Sonko brought in Sh10.11 billion against a target of Sh17.23 billion.

The under-performance was due to the challenges experienced in the country in regards to the long political and electioneering period.