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Nairobi takeover: KRA plan to seal city revenue gaps

BUSINESS
By Josphat Thiong'o | Mar 24th 2020 | 3 min read
By Josphat Thiong'o | March 24th 2020
BUSINESS

The Kenya Revenue Authority (KRA) will roll out a new revenue collection system for Nairobi County in July.

The taxman took over revenue collection in the capital on March 16 after the signing of the deed of transfer between Governor Mike Sonko and Devolution CS Eugene Wamalwa.

In the deed, Sonko ceded health, transport and public works, utilities and ancillary as well as planning, and development services to the national government.

The new revenue collection system, being developed by the Interior ministry, will be known as Taifapay and is expected to be ready by June.

This was revealed in a KRA takeover strategy document seen by The Standard, which details the measures to be implemented by KRA Commissioner General Githii Mburu (pictured) to ensure effective revenue collection in the capital.

“The Ministry of Interior has developed a system comprising of a portal, payment gateway (Taifapay) and a back office system. Completion of the system is by June and roll-out in July 2020,” read the strategy paper.

Revenue collection in Nairobi is currently carried out through the National Bank of Kenya after JamboPay’s contract was terminated in April 2019.

Jambopay had served the county since 2014 and was responsible for the automation of Nairobi's 137 revenue streams, including parking, rates, single business permits, fire inspection certificates, billboard advertisements and food handlers’ certificates.

City Hall also depends on the Local Authority Integrated Financial Management System (LAIFOM) and e-construction for revenue collection and issuance of construction permits.

Obsolete systems

However, KRA, in its report, has termed the current LAIFOM system as obsolete. It also points out a lack proper reconciliation of payments between NBK and Nairobi County and incomplete records.

“The systems are prone to challenges such as outdated database infrastructure, data centre instability, outdated anti-virus and operating system and the construction permit system is managed by a third party,” read KRA's report in part.

In the next 100 days, however, KRA has set out a raft of measures such as improving availability and reliability of LAIFOMS, relocating the county’s database and system to its data centre.

The revenue authority will also be integrating its systems with those of NBK and use KRA offices to provide services to Nairobi residents reducing the human traffic at City Hall.  

At the same time, KRA has established the County Revenue Division (CRD) that is charged with enforcing revenue collection and ensuring compliance.

The office of the CRD will include county officers and the KRA officials. It will however be under the overall supervision of the taxman.

“The KRA has already created the CRD, identified KRA and county officers to be seconded to the division via a gazette notice published on March 17, 2020,” states the report.

Last week, the taxman gazetted new bank accounts to be used for revenue collection.

Business owners, motorists and residents will now be required to pay revenue through Cooperative Bank Account number 01141709410000 (City Hall) and NBK account number 01071225251100 (Times Tower).

City Hall collected Sh10.25 billion in the 2018/19 financial year, a short fall from the highest ever collected revenue of Sh11.7 billion in the 2014/15 financial year.

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