County begins to tax bodaboda operators in bid to raise Sh250 million

Bodaboda riders wait for passengers at Ang'awa junction stage in Kisumu on July 31,2018. Kisumu county government has directed that the riders, who were exempted from taxation by the last regime will pay tax effective August 01. (Denish Ochieng',Standard)

Bodaboda operators in Kisumu are set to start paying taxes today as the county government eyes to raise Sh250 million from the sector.

County executive for Finance Nerry Achar Tuesday announced the new measure, after previous attempts failed due to non-committal from the operators.

According to Achar, at least 35, 000 operators are registered through Saccos and groups within the county, and each operator will be required to remit to the revenue stream Sh20 per day.

“This is just a tentative figure which we have from the leaders of the operators. But we know that there are many more operators who are not registered, and this revenue estimate may go higher,” said Achar.

The announcement however comes amid murmurs from a section of the operators who said there was no inclusive participation in coming up with the measure.

For the last three Financial Years, the county has expressed intentions to tax the motorcyclists, but this has not been achieved following protests from the operators.

In 2017, former Governor Jack Ranguma had to put on hold the implementation of the initiative after the operators protested and threatened him with dire political consequences.

And with the change of regime, Governor Anyang’ Nyong’o is eying increased revenue saying the county has a potential to ‘fly with the eagles’ such as Mombasa, Kiambu and Nakuru which raises more revenue than Kisumu despite the lakeside county having superior status.

Tuesday, Achar said the failure to implement the taxation of the bodaboda sector has been occasioned by lack of enforcement. Neighbouring counties such as Homa Bay are however drawing revenue from the sector.

Achar said this loophole has seen an influx of the operators from other counties, who come on a daily basis to operate in Kisumu, benefit from the services offered by the county, but not pay back through taxes.

On Monday, the county department of Finance met a section of leaders of bodaboda groups in what Achar termed as a ‘successful deliberation ahead of rolling up the initiative’.

And in a bid to finding a solution to losing the bodaboda revenue, Achar said the county government is set to recruit 500 revenue collectors and enforcement officers who will be charged with monitoring revenue flow from among other sectors, the operators.

He said the county will use saccos and bodaboda groups to formulate a modality of payment, in which operators will remit their money regularly through the groups.

“I therefore urge all bodaboda operators to register in a group, so that we can easily operationalize this initiative as well as helping us plan in terms of their welfare,” said Achar, adding that the operators had one month to comply.

He added: “Everybody is paying tax including mama mbogas. The bodaboda sector has no reason not to pay tax, yet it is one of the major employers in this area.”

He said the registration will also allow the county to manage the sector through weeding out criminal elements from the sector.

A section of operators however distanced themselves from the engagement, saying they have not been prepared for the implementation of the initiative.

Nelson Odire, chairman of Manyatta Bodaboda Operators said the county had expressed intentions to engage them, but the engagement is yet to commence.

“If the Minister has made any announcement in regards to bodabodas operators paying tax then we will have to meet as an office and as members and make an official statement. As at now it is true there have been attempts to have such a discussion but it has never been,” said Odire.

Achar said the new revenue stream adds to the raft of measures which have been put in place by the county government in a bid to raise the revenue from the current Sh1 billion to Sh5 billion.

According to the official, implementation of the cashless revenue system and county staff audit are other methods which the county has employed to reduce on revenue leakage.

“We have done some benchmarking with other counties and we have realized some of the loopholes that have made us collect less revenue. We have since commenced sealing them, and we can raise more than Sh5 billion from the local revenues,” he said.