Nyanza counties on the spot over revenue growth

Nyanza counties are on the spot over poor revenue collection despite having great potential to collect billions to fast-track development. Various State and  county task forces on revenue collection have revealed that immense revenue potential exists in the region.

In Kisumu County, Kenya Revenue Authority (KRA) data shows it has the potential to collect up to Sh4 billion each financial year. But the county is only able to collect less than Sh1 billion each financial year, raising eyebrows where the money is.

Governor Prof Anyang Nyong’o took over when the revenue hit the Sh1.2 billion mark, but the collections dipped even further.

Nyong’o established a revenue taskforce that confirmed KRA revelations that they could collect up to Sh4 billion.

The county government missed its revenue target for the 2019/2020 financial year by more than Sh634 million. Nyong’o said while they had projected to collect more than Sh1.4 billion that financial year, they only got Sh804,387,971.

The governor admitted his administration has not been doing well as far as revenue collection is concerned over the last six years. The subsequent financial years 2021/2022 have not seen the revenue proceeds hit even a billion mark.

‘’We are still sealing the loopholes and hope that we will be able to meet the set targets,’’ said Finance CEC George Okong’o. He attributed the falling revenues to the Covid-19 pandemic among a host of other social, economic and environmental factors.

Financial year

The county projects to collect in the preliminary stage up to Sh1.5 billion, saying KRA figures can’t be realised in these hard times. In Homa Bay, although  the county has the capacity to collect up to Sh2 billion each financial year it is not even collecting a quarter.

According to a report by the county revenue taskforce committee, the county is only able to collect Sh136,808,555 in a financial year.The taskforce was formed by Governor Gladys Wanga and Deputy Oyugi Magwanga to know their revenue streams.

They formed the taskforce immediately after they took office to map the revenue streams and is amazed they have a great potential. Wanga is keen to find ways of streamlining revenue and also to identify the challenges affecting optimal revenue mobilisation.

The county has already gone cashless in its revenue collection to boost its collections and reduce revenue pilferage.The taskforce chairman, Polycarp Okombo, while handing over the report to the Governor decried massive revenue seepage.

The revenue audit which took 60 days revealed double receipt by some wayward staff all of which was not remitted to the county. “We have come up with recommendations that will help in preventing the loss of revenue in our county,” he said.

“We did examinations by walking in various departments and studying how they do business in the current revenue structure and also engaged stakeholders both internal and external,”Okombo added.

According to the chairman, although the county has the potential of collecting Sh2 billion, its target has been capped at Sh1 billion. “We want to see Homa Bay’s own source revenue grow from to Sh1 billion this financial year,’’ said Okombo

Revenue targets

Okombo who has been named the new County Trade, Industry, Tourism, Cooperative development and Marketing Executive said the revenue targets can be realised through tax collection from boda boda riders. There are 56,000 riders in the whole county, capable of recking in up to Sh268,800,000.

If they pay Sh20 a day, that alone amounts to Sh1,120,000, translating to Sh5,600,000 a week and Sh22,400,000 a month. He said the county government has not been collecting maximum tax from the sector in the past due to a lack of a proper framework.

As a result the lack of payment infrastructure, boda boda riders refused to pay taxes. However, Wanga has now reached out to them and they have agreed to pay taxes. The committee said Beach Management Units (BMUs) have also been collecting taxes from fishermen but do not remit.

He said the county government leadership has already engaged the BMUs and agreed on the return of revenue collection.

In Siaya and Migori, the same story is repeated. The two counties have been collecting less despite their potential to hit a billion mark.

Siaya has made efforts every financial year to improve its own source of revenue collection and to achieve the set targets. The County Government of Siaya constituted a taskforce, in the financial year 2020/2021, to strengthen revenue collection. Governor James Orengo also constituted a taskforce that is working on the best ways to improve revenue collection.

Migori Governor Ochillo Ayacko has also formed a similar taskforce looking into the revenue seepage.