Sakaja unleashes tax wrath to squeeze city hustlers dry

Nairobi Governor Johnson Sakaja when he launched trucks that will be used to make Nairobi Green at Uhuru park on September 10,2023. [Denish Ochieng, Standard]

Nairobi County is out to further squeeze the city’s residents with higher taxes and levies, even as they are still reeling from the recent tax measures that the national government has imposed on them following the implementation of the Finance Act 2023. 

The Johnson Sakaja-ledd county government plans to hit hard the people that the Kenya Kwanza government romanticised as hustlers during the campaign trail.

Through the Nairobi City County Finance Bill, 2023, the government has proposed a huge increase in the daily parking fees for motorists, a hike in rates for stalls in markets in different parts of the city and an increase in rent for residential houses owned by the government but used largely by low-income earners.

The county government plans to increase daily parking fee by 50 per cent to Sh300 within the Central Business District, increase rates for leasing market stalls across the different markets it owns across the city while preachers preaching in different parks within the city over lunch hour will have to part with Sh500 per day.

Old facilities

Other than increasing old rates for different services, the county government through the Finance Bill has also proposed the introduction of new charges for new services and use of some of the old facilities that did not attract any charges previously.

The Bill has proposed a review of the Nairobi City County Transport Act, 2020, increasing the amount of money that motorists pay to park their vehicles in Zone I, including town and other nearby areas such as Westlands, Eastleigh, Upper Hill, Industrial Area and Gigiri to Sh300 per day.

Vans and pickups will pay Sh500 per day from the current Sh200 while lorries of over five tonnes will pay Sh3,000 per day from the current Sh1,000. It however offers a slight reprieve for motorists parking in Zone II (commercial areas other than those included in Zone I) reducing the daily parking fee to Sh100 from the current Sh200 for saloon cars, Sh150 for vans and pickups from Sh200 and Sh500 for minibuses and non PSV buses from Sh1,000.

It also offers free parking to Nairobi residents in areas around mosques and churches during prayer days. For areas around mosques, parking will be free between 12pm and 2.30pm on Fridays while those around churches will not be charged during Saturdays.

The Bill also proposes the introduction of automated parking areas where motorists will pay Sh100 for the first hour and Sh50 for every hour after that. In Zone II, the rate for the first hour is Sh50 for the first hour.

The Bill also has introduced a new category for non-digital taxis that will pay a monthly rate of Sh3,000. The traditional taxis will also pay another Sh5,000, a fee for picking up and dropping passengers within designated areas within five minutes.

Digital cabs have been paying this ‘picking and dropping fee’ at a rate of Sh1,000 per year but this will also go up to Sh5,000, at par with the traditional taxis.

Taxis will also be required to pay a new ‘taxi registration fee’ of Sh1,500. Motorcyclists plying the boda boda business — including passenger and delivery boda bodas – too will pay a Sh1,000 ‘boda boda registration fee’.

Traders operating at different county-owned markets will also be hit hard. At the City Market for instance, traders who operate their businesses from what the city terms as large stalls will see their monthly rent increase to Sh16,250, an increase of 30 per cent from Sh12,500 currently.

Rent for a shop will go up to Sh39,000 per month from the current Sh30,000. 

An increase of about 30 per cent on rental charges on stalls and shops will be effected across other markets throughout the city. For instance, the cheapest stall, one in Dandora Market that has been attracting a rental charge of Sh500 will go up to Sh650 while the most expensive, a stall at the Dagoretti Relocation Site Market on Ngong Road will increase from Sh40,000 to Sh52,000 at the moment.

The county government is also proposing a hike in market services which is expected to see an increase in the cost of produce sold at the markets as traders pass on the higher costs to consumers.

Businesses offering services such as water distribution through bowsers will pay a new charge of Sh10,000 per truck annually while residents will pay a new fee for effluent discharge of Sh10,000 whenever they need to empty their septic tanks.

The county government is also set to hike rents by 25 per cent in residential houses that it owns in different parts of Nairobi. This will see a one-bedroom house in Ngara go up to Sh7,500 per month from Sh6,000.

Rent for a three-bedroom flat in Kariokor will increase to Sh12,500 per month from Sh10,000 currently while a three-bedroom corner maisonette in Buru Buru will increase to Sh25,000 from Sh20,000.

The Sakaja government has in the past said it would support the creative industry and has gone on to hike fees as well as introduce new ones aimed at increasing revenue from individuals and companies shooting music videos, movies and other content.

Shooting a commercial video at Uhuru and Central Parks will cost content creators Sh10,000 per hour while music videos at Uhuru Park will cost Sh5,000 per hour.

The county is especially looking at minting money from Uhuru Park which has been shut down for a prolonged period of time for its revamp and to allow regeneration in a project that was led by the defunct Nairobi Metropolitan Services (NMS).

Uhuru Park

One of the new attractions in the revamped park is a retired aeroplane that has been repurposed and the county plans to lease it to an operator that can operate a hotel from the old plan at a lease cost of Sh30,000 per month. The vendors who will be operating from Uhuru Park will pay Sh4,000 per year for a clearance certificate and another Sh10,000 for a trading licence.

Live music concerts that will be held at Uhuru Park will cost the organisers Sh100,000 from the current Sh5,000. In case the performers in a live event at international artists, it will cost the organisers Sh150,000.

The county government is eyeing investors to put up an electric vehicle charging station at the Green Park Terminus. The firm that will lease the designated ground to set up the station will pay Sh5,000 per square metre every year. “Lunchtime preaching on lawns” will attract a daily fee of Sh500 at Kamukunji and Jevanjee Gardens and Sh1,000 at City Park.

The city also wants to introduce a Sh100,000 fee per day for political rallies held at Kamukunji.

The county government is also looking for more revenues from large entities operating within Nairobi. It has proposed the imposition of new licensing charges for supermarkets, with large supermarkets expected to pay a new charge of Sh125,000 per year.

Large supermarkets are those with between 76 and 100 employees or operating within a space of between 4001 and 5,000 square metres. Smaller supermarkets with between 25 and 50 employees will pay a new licence fee of Sh75,000 per year while large retail shops with five employees will pay Sh25,000.

Mid-sized retail shops, which have been defined as those with three to five employees, will however see their licence charges drop to Sh15,000 from Sh20,000. The county also has its eyes on the aviation sector, and in the Finance Bill, it has proposed that large airlines – operating more than 10 aircraft – flying in and out of Kenya pay a new trade licence fee of Sh500,000.

Smaller carriers with between six and 10 aeroplanes pay Sh300,000 and those with up to five planes pay Sh200,000. With the proposed taxes, Nairobi County hopes to grow revenues, an area where it has been underperforming over the years, according to reports by the Controller of Budget (CoB).

Over the nine months to March this year, the county had collected about 40 per cent of what it projected to collect over the financial year to June 2023, an indication that it did not meet its revenue collection target.

“In the first nine months of the financial year 2022/23, the county generated a total of Sh7.29 billion from its own sources of revenue. This amount… was 39.8 per cent of the annual target,” noted COB in a report reviewing budget implementation by different counties.

“The highest revenue stream of Sh2.18 billion was from land rates contributing to 30 per cent of the total own source revenue collected during the reporting period.”