Counties increase taxes in a bid to boost revenue collection

Harvested potatoes on sale at Olkalou town in Nyandarua County. [John Githinji, Standard] As Kenya marks 10 years since the devolution of government, the spotlight is on what counties are doing to develop their regions. This week, governors will be taking stock during the Devolution Conference in Eldoret amid Kenyans' displeasure over the high cost of living. The onset of devolution 10 years ago decentralised most government services and functions to the counties, among them budget making and financial management. Raising revenues to fund the increasing budgets has, however, turned out to be a tall order with a majority of the counties suffering the same affliction as the national government of inadequate cash to fund expenditure. Even as businesses suffer from a slowing economy, counties have resorted to increasing taxes to fund their operations on top of the shareable revenue they get from the National Treasury. In the South Rift, counties have implemented wide-ranging tax increases in their budgets for the 2023-24 financial year. An analysis of budgets prepared and passed by Narok, Nyandarua and Kericho counties shows they have increased levies on parking and solid waste collection, and livestock and horticulture sales. In Nyandarua, the new taxes mainly target small animals and agro-processing industries to increase its revenue collection, doing away with incentives introduced by the former government to encourage investors. The budget by Governor Kiarie Badilisha's administration is keen on retaining charges on permits and licences introduced by the former regime under Francis Kimemia. Apart from the small animals, the taxation also targets vegetables, where items such as cabbage will be taxed per piece. Among the introduced charges include chicken and rabbit on transit that will be charged Sh10, a piece of cabbage on transit will be charged 50 cents, cows and camel will be charged Sh150, sheep and goats Sh50, and donkeys and pigs Sh100 each. On horticulture, introduced charges include cereals and carrots which attract between Sh15 and Sh30 per bag, while a tonne of green maize, onion, green peas, and other vegetables will be charged Sh400 to either enter or exit the county to other markets. Also targeted are export horticultural produce at Sh400 per tonne, and the government has equally retained market charges in what the traders feel is double taxation. High-end hotels with villas and cottages but not serving alcohol will pay Sh100,000 licence fees per year. Private car park owners who were exempted from taxation will now be required to pay between Sh15,000 and Sh80,000 per business per year. Commercial internet service providers will pay Sh17,250, while commercial businesses with large format printers will pay Sh20,000 for a permit. Narok County aims to raise a whopping Sh4.5 billion in the annual budget, which stands at Sh15 billion, with a huge chunk of revenue expected to come from the Maasai Mara National Game Reserve. The county's Finance and Economic Planning Executive David Ole Muntet said they target Sh9.2 billion from the park. The park entry fee has been reviewed and harmonised to $100 per entry during the low season, and $200 during the high season. "We have increased the charges for adults per person from $70 currently charged to clients residing in facilities within the game reserve and $80 currently charged to clients residing in facilities outside the game reserve," Mr Muntet said. The budget has proposed an increase in the penalty for off-road driving in Maasai Mara from Sh20,000 to Sh50,000 for first offenders to discourage the vice, and an increase in the penalty for repeat off-road driving from Sh30,000 to Sh70,000. Following the completion and opening of Narok Bus Park for public use, Muntet proposed that stall owners who currently pay Sh600 will pay Sh2,500 per stall per month. The county allocated Sh5.347 billion for operations and maintenance while development got Sh4.573 billion, accounting for 30 per cent of the budget. In Kericho, Governor Erick Mutai has outlined a robust plan to raise revenue. With an annual budget of Sh8.9 billion, the county aims to generate Sh530.1 million as its own revenue. One of the primary avenues will be through the leasing of county land. The Finance Act stipulates that the county will charge Sh3,200 per acre.

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