Sonko targets online businesses in budget

Nairobi Finance Executive Charles Kerich prepares to read the 2019/2020 budget at the county assembly yesterday. [Josphat Thiong’o, Standard]
New tax measure announced by Nairobi Finance executive Charles Kerich yesterday will see residents dig deeper into their pockets to finance the Sh35.2 billion 2019/2020 budget.

Those who run online businesses will start paying taxes as Mike Sonko's administration seeks to meet its Sh17.32 billion revenue collection target.

Nairobi will also rely on an expected Sh17 billion allocation from the national government to finance its operations.

Parking fees, which were reduced from Sh300 to Sh200, will be reviewed upwards to plug a hole in revenue collection that was created by the downward review.

Mr Kerich noted that the review had led to increased congestion in the central business district. 

Waste management

Residents will also be charged more for solid waste management services, with the specific charges set to be announced soon.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.

Gamblers have not been spared, with Kerich seeking to implement the Betting and Lotteries Act that will see City Hall tax the gambling and entertainment industry.

Currently, the county government only collects revenue from pool table owners and premises.

“The good proposals cannot be realised unless the county can be on overdrive to collect Sh17.32 billion projected from internal sources of revenue in the coming financial year," Kerich said while reading the budget highlights at the county assembly yesterday.

"The county shall focus on addressing challenges that hamper optimal revenue collection.”

The county will also propose amendments to relevant laws to introduce a city bed-occupancy levy whose charges will be determined later. Kerich said they would be counting the number of beds in every hotel.

City Hall will also restrict the issuance of waivers that may bar the county from achieving revenue targets.

“Any waivers issued shall be done in strict compliance to the Public Finance Management Act, 2012 and the Nairobi City County Tax Waivers Administration Act, 2013,” added Kerich.

He said that the county shall continue restraining the growth of the wage bill, allocating more resources towards debt resolution and investing in high return areas.

In the 2017/2018 financial year, City Hall collected approximately Sh10.1 billion as at May this year against a target of Sh15 billion.

Kerich attributed the shortfall to challenges the county faced, citing an overreliance on automation of revenue by JamboPay without corresponding efforts on innovation.

“Last month the county terminated its contract with JamboPay and has now directed effort towards rolling out an effective internal revenue management system devoid of manipulation and full back-end controls.

“This coupled with innovation of creative enforcement models for rapid growth of source revenue shall have the net effect of achieving the target contained in the budget for the financial year 2019/2020,” he said.

At the same time, the county government has allocated the lion’s share of its budget (21 per cent) to the health docket pegged at Sh7.4 billion.

The transport sector was allocated Sh3.64 billion, while the environment and water department received Sh2.7 billion for the expansion of water and sewerage infrastructure.

The county assembly was allocated Sh3.2 billion.

Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Get the latest summary of news in your email every morning. Subscribe below

* indicates required
Nairobi Finance executiveCharles KerichMike SonkoParking feesPublic Finance Management Act2012Nairobi City County Tax Waivers Administration Act2013