Nakuru sets up revenue agency

Nakuru Governor Lee Kinyanjui .

Nakuru County Government has established a revenue agency in an ambitious bid to increase its local revenue collection to at least Sh4 billion annually up from about Sh2.5 billion.

Through a body similar to the Kenya Revenue Authority (KRA), Nakuru seeks to bolster and double its own revenue base and reduce overreliance on the national government’s equitable share and other grants.

The move comes after Governor Lee Kinyanjui last month assented into law the Nakuru County Revenue Authority (NRA) Bill, in a bid to enhance efficiency in county revenue collection and management.

The law paved the way for the county to form the agency, that will assess, collect and account for all revenues.

According to Governor Kinyanjui, the independent body will ensure revenue collection is streamlined to address under collection, fluctuations and seal gaps that lead to leakage.

“We want to use Information Communication and Technology and integrate all own-revenue sources such as taxes, user fees and licences to ensure compliance,” stated Mr Kinyanjui.

This means the NRA will serve as a one-stop-shop that will certify residents or businesses that have met all their rates obligations at the click of a button.

The authority will also issue compliance certificates.

Eying city status 

The move comes at a time when Nakuru town is eying city status.

Already, the Moses Kajwang-led Senate Devolution and Intergovernmental Relations Committee has approved the application by Nakuru County government, to have Nakuru Municipality elevated to a city status.

The committee in its findings noted that the local revenue generated in the past three financial years demonstrated the capacity and potential of Nakuru in own revenue generation.

Nakuru has been unable to meet its own revenue targets, necessitating the need for a new legal framework.

The independent revenue body will finance its own operations from its collections and will not depend on allocations from the county government.

This, according to Mr Kinyanjui, will ensure a future administration does not cripple it by under-funding it.

The law has capped the body’s expenditure at only two per cent of their collections, to cater for its operations and salaries.

The model, according to the devolved unit, will also reduce physical enforcement, where county workers visit homes and business premises to ensure compliance.

Nakuru collected Sh2.28 billion in 2017/2018, as local revenue, according to the financial records.

The county collected Sh2.8 billion and Sh2.4 billion as Own-Source Revenue in 2018/2019 and the 2019/2020 financial years respectively.

The revenue dropped last year due to the Covid-19 pandemic.

Create robust revenue base 

Governor Kinyanjui seeks to bolster and create a robust revenue base, which in a period of five years between 2013-2017, was Sh40.9 billion cumulatively against a target of Sh44.5billion.

Local revenue in the period under first Governor Kinuthia Mbugua, failed to meet set targets, with the county collecting Sh8.16 billion against a target of Sh11.74 billion.

According to data from the county finance department, Nakuru received a total of Sh32.7billion disbursements from the National Treasury as equitable share and conditional grants, constituting the 80 percent of the county’s total revenue up to 2017.

The county revenue collection failed to meet set targets since the advent of devolution to 2017.

It however, recorded growth in financial year 2014/2015, 2015/2016 before declining in 2016/2017.

For instance, in 2013/2014 the county collected revenue amounting to Sh1.3billion against the target of Sh2.55 billion, in 2015/2016 the total revenue was Sh1.7 billion against Sh2.3 billion, in 2016/2017 the county collected Sh1.5billion against Sh2.5 billion.

Governor Kinyanjui says the county seeks to take advantage of its rich tourism base, evergreen agricultural sector, real estate as well as its fairly good infrastructure to double its revenue.

“We have received farming of key crops including the lucrative pyrethrum, avocados, potatoes, carrots among others with eyes set on international markets to boost revenue,” said Mr Kinyanjui in an interview.

The county has also initiated discussions with the Senate and other State Departments as it seeks to benefit from some of its abundant resources including geothermal energy, agriculture cess from cut flowers, tourism and forestry subsectors.

Nakuru county, which is home to Africa’s largest geothermal power plants located at Olkaria in Naivasha and Menengai in the outskirts of Nakuru Town, is banking on the steam power to drive its economy and bolster its revenue base.

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