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iLab joins bid to collect county cash

FINANCIAL STANDARD
By Macharia Kamau | Jul 1st 2014 | 2 min read
By Macharia Kamau | July 1st 2014
FINANCIAL STANDARD

Kenya: Strathmore University’s iLab Africa is among firms bidding for a contract to collect taxes for county governments, a move that deepens linkages between academia and industry.

iLab Africa — the research and innovation arm of Strathmore University — applied to collect taxes for 10 of the 15 counties that had asked for bids. It is the lead in a consortium with two other firms, and was shortlisted by four counties that are yet to announce the winning bids.

iLab and its two partners have been running a pilot in some constituencies in Kiambu County, which is one of the counties that shortlisted them.

Mr Tirus Wanyoike, the business development manager at iLab, said the consortium had, for close to two months now, been collecting revenue in Gatundu North and South.

Forty firms bid for the revenue collection job in Kiambu County, and six were shortlisted.They were required to test their systems and have been collecting revenue across the county.

Pilot run

Among the firms are County Pro, an e-Government platform deployed in other parts of the world, and Kenyan firm iPay, which has a system that integrates mobile money, credit and debit cards, and cash payment platforms.

“Many firms are offering receipting solutions in the expectation that this will increase transparency. The challenge with this is that you get an alternate payment collection method that does not increase your revenue collection. There are instances where parking attendants will have duplicate receipt books,” said Mr Wanyoike.

“The main issue is the processes that take place after county residents and businesses have made their payments. The system should be able to track the money to the last person and be reflected into the system, allowing the county’s senior personnel to monitor collections.”

Tax evasion

He said iLab’s system has features to eliminate fraud such as bar codes on business permits, with information on the amount paid for the permit and the date the payment was made. These can be read using a basic scanner.

Many counties are reportedly collecting only a fraction of the revenue they need due to corruption and tax evasion.

Faced with growing budgetary needs, many have, in their first year, increased certain levies in a bid to bulk up their cash collections. Analysts have, however, noted that county governments could easily increase their revenues by sealing leakages in tax payments collection.

“Counties are increasing their levies in a bid to grow revenue, but there would be no need for that if they sealed the loopholes that exist at the moment. Automation of revenue collections is one of way to do so,” said Wanyoike.

Kisii County also recently announced it has contracted Diamond Trust Bank to automate revenue collections for parking and boda boda licence fees.

County inspectors will be able to verify payments by inputting vehicle registration numbers into the system.

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