Kisumu County embarks digital tax system to raise revenue

Kisumu County Governor Peter Anyang' Nyong'o. [Photo/Courtesy]

A new digital tax collection system has seen the county's revenue increase by about 150 per cent in just two weeks, the finance executive has said.

Nerry Achar said a mobile money payment being administered by Strathmore University had proved that complete automation could raise up to Sh7 billion annually from the second year of implementation.

Although widely criticised as hurriedly imposed, the directive that all revenue be channelled through a paybill from July 1 more than doubled the proceeds from conventionally undertapped streams, according to Mr Achar.

He sought to demystify fears that the county was losing revenue because of the implementation of the system and that accounting was strained by channelling of unsegmented revenue into one account.

Integration hitches

“It is true we are losing money out of integration hitches and fewer revenue streams, but the mobile payment was just a stopgap measure as we work on a more comprehensive system. Such a system is not plug and play; we are customising the software to work for us,” he said.

At Kibuye market, for example, the county collected only Sh300, 000 on the first day of using mobile payment against conventional collection of Sh600, 000. Proceeds from parking were nowhere near 50 per cent of previous earnings.

Achar said although the mobile payment had left loopholes for tax evasion, in just two weeks, day-to-day collection had risen by 50 per cent even as earnings from markets, car parks, land rates and licences remained low.

This he attributed to change of revenue collection personnel and edging out of cartels that were eating into the revenue streams and competing with the county government for resources.

“Change of personnel has unlocked Sh236 million in just 23 days,” said Achar.