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Devolved units’ revenue grows 28pc to Sh33b

BUSINESS
By Paul Wafula | October 12th 2015

The revenue generated by county governments grew by 28 per cent last year to Sh33.8 billion, confirming the devolved units have been able to seal revenue leakages to lift earnings.

City Hall (Nairobi) tops the list of best performers in revenue collection after it generated Sh11.5 billion.

However, Tana River county only raised Sh33 million from internal revenue, which is 30 times less than the top performer, as it becomes clearer that counties located far from major towns are struggling to find businesses to tax.

A report prepared by the Controller of Budget shows that county governments generated a total of Sh33.85 billion from local sources, which translated to 67.2 per cent of the total annual local revenue target.

“This was an improvement compared to Sh26.3 billion realised in 2013/14 when the performance was 48.5 per cent of annual target,” the report covering the year 2014-15 read in part.

The report comes at a time when counties have been criticised for poor revenue collections in what has forced most of these units to be overly dependent on national government.

After devolution, counties were given powers to come up with their own tax structures, especially tax measures that target real estate and land use, but have been unable to devise creative ways to generate cash.

Some counties have also come under the wrath of the tax payer for suggesting ridiculous tax measures including taxing boda bodas, cyclists, chicken and levies that target burying loved-ones.

This has put the county bosses on a collision course with locals, especially at a time when they are under pressure to justify excessive recurrent expenditures.

On average, counties are collecting about Sh2.5 billion every month from land rates and local taxes. But March was the best month, when the counties collected Sh4.6 billion. The data shows that counties generally collected higher taxes in 2014 compared to previous years.

Counties with big towns, mostly capitals of the previous administrative blocs before devolution, continue to outshine the farflung counties and those in regions previously labelled as marginalised.

Nairobi City County topped the list of best performers in total collection after it generated Sh11.5 billion in local revenue.

Predictably, it was followed by Mombasa, Nakuru, Kiambu and Narok counties, which raised Sh2.49 billion, Sh2.2 billion, Sh2.11 billion and Sh1.64 billion respectively. Counties that raised the lowest amount of local revenue during the reporting period were West Pokot, Marsabit, Mandera, Lamu and Tana River at Sh103.9 million, Sh99.12 million, Sh87.73 million, Sh.61.67 million and Sh33.03 million respectively.

Ironically, most of the counties that generated the least amounts ended up spending the biggest share of what they received from the national government as devolved funds. Only nine counties met and exceeded their own revenue targets.

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