How KRA collecting Nairobi County revenue will affect you

KRA Commissioner General James Mburu (Right) seals a deal with Nairobi County Finance CEC Allan Igambi on handing over of city’s revenue collection to the taxman. Looking on is Treasury CS Ukur Yatani. [Samson Wire, Standard]

The Kenya Revenue Authority (KRA) has taken over the collection of revenue in Nairobi County as part of the deal struck between  Governor Mike Sonko and the national government.

Collection of revenues, which includes parking and trading licence fees, is perhaps the most critical functions of the county administration.

This follows last week’s agreement between Governor Sonko and President Uhuru Kenyatta in which the national government takes over crucial sectors from the city’s leadership and aimed at averting a crisis at City Hall. 

Yesterday, the county government appointed the tax authority to be in charge of all revenue collection.

“Pursuant to Article 5.5 of the Deed of Transfer of Function from the Nairobi City County Government to the National Government gazette February 25, 2020, and in accordance with section 160 of the Public Finance Management Act, 2012...the Nairobi City County Government appoints the Kenya Revenue Authority as the principal-agent for overall revenue collection for all county revenue for a period of twenty-four months, with effect from March 16, 2020” read part of the Gazette Notice signed by Finance Executive Allan Igambi.

The deal is a mouth-watering opportunity for KRA to get its hands on such data as the number of single business licences issued by the county government after KRA rolled out the turnover tax which will be levied at three per cent of revenue on businesses that make less than Sh5 million a year. 

The taxman might also get information on land rate payments that could help nab landlords not paying taxes.

A deal signed at State House last week by Devolution Cabinet Secretary Eugene Wamalwa and Sonko and overseen by Uhuru saw the national government take over health, transport, public works and planning and development services.

This came days after ODM ward representatives tabled a notice of motion to impeach Sonko. The MCAs listed 16 grounds for removal of the governor, including abuse of office and irregular procurement.

Among the said crimes were the irregular award of a Sh1.5 billion tender for construction of stadiums.

Sonko has also been accused of unilaterally sacking staff through social media without a fair hearing and failing to name a deputy governor despite an advisory by the Supreme Court.

Poor systems

Former Controller of Budget Agnes Odhiambo had proposed that counties contract KRA as their revenue collection agents.

“Counties are collecting less revenue than their potential, and this is because of poor systems and leakages,” she said in August last year.

“Counties should consider using KRA to collect taxes on their behalf.”

According to reports, there is an impending reshuffle where county executives and heads of departments will be retained but deployed to other functions.

Heads of departments affected by the reshuffle will now report directly to the national government.