Politics and policy
Councils target traders to fund deficit
Posted Thursday, June 28 2012 at 22:30
- Budgets for Nairobi, Eldoret, Kisumu and Mombasa will run deficits.
- Kisumu Municipal Council - Sh1.1 billion budget
- Eldoret Municipal Council - Sh1 billion budget
- Mombasa Municipal Council - Sh3.6 billion budget
Salaries and debt payments will take up the bulk of the budgets read by local authorities for the next fiscal year, leaving little for utility expansion and upgrade.
With the exception of Wareng County Council, which projects a surplus at the end of the year, the budgets for Nairobi, Eldoret, Kisumu and Mombasa will run deficits.
The deficits point to the councils’ continued dependence on grants from the Central Government for their operations though the Local Authorities Transfer Fund and potential increases in charges for municipal services.
While releasing a Sh1.1 billion budget, Kisumu Municipal Council’s finance committee chairman Walter Muge said: “The council is going to start collecting levies from some business activities that are are currently not being exploited. This will help us finance the current deficit.”
He announced that boda boda operators would start paying a monthly fee of Sh200 for each motorcycle from next month.
Some of the businesses affected in the new tax measures include motorcyclists, quarry operators, fishermen and tour operators.
The council will run a deficit equivalent to the revenue collection of Sh526 million, which it hopes will be bridged through LATF and grants from development partners.
The Eldoret Municipal Council, which announced a Sh1 billion budget, said it would revise its fees because the existing charges were set 10 years ago.
Debts and salaries will take up Sh555 million, more than half of the council’s budget. Significantly, the two votes will take up more than the Sh532 million that the council expects to collect from its internal sources.
The deficits also portend aggressive revenue collection by council employees as was seen in Nairobi early this month during the dispute between City Hall and the Kenyatta International Conference Centre.
“Defaulters, especially rate payers should pay up to avoid more penalties and any other actions contemplated by the council,” said Eldoret Municipal Council finance committee chairperson Rebecca Magut.
In Central Province, the Nyeri Municipal Council said it would finance its deficit by auctioning plots owned by land rate defaulters who owe the council more than Sh400 million.
The council will spend Sh422 million against a revenue of Sh366 million.
And at the Coast, the Mombasa Municipal Council unveiled a Sh3.6 billion budget.
Salaries will constitute 38 per cent (Sh1.4 billion) of the budget while debt payments will take Sh433 million. The council is indebted to the tune of Sh2 billion against projected revenues of Sh3.2 billion.