Nairobi County’s own source revenue in the first quarter ended September hit a record high of Sh2.05 billion, buoyed by steady growth in the advertising, food handling and Unified Business Permits (UBPs) streams.
This is a 13.8 percent rise from the Sh1.8 billion raised in the same period a year earlier and was driven by increases of 981.4 percent, 868 percent and 403 percent in revenues from advertising, food handling and UBPs respectively.
Improved collections are critical to helping the county to wean off its reliance on disbursements from the National Treasury in running daily operations and delivering key services.
The county attributed the rise to enhanced revenue collection systems that have helped cut default rate besides reducing leakages.
An analysis of the data shows that receipts from issuance of billboards and advertising rose to Sh200.85 million in the first quarter of the current fiscal year from Sh18.57 million a year ago followed by those for food handling that rose to Sh28.51 million from Sh2.95 million.
Collections for UBPs jumped to Sh348.09 million in the first quarter of the financial year from Sh275.8 million in the same period a year earlier.
Land rates —traditionally the single biggest revenue stream for the county— posted a marginal growth to hit Sh212.3 million from Sh196 million last year.
The steady rise in the three streams helped to ease the impact of reduced collections from parking fees and building permits.
Nairobi County’s collections from parking fees dipped six percent to Sh408.5 million in the first quarter from Sh434.4 million in the same period last year while building permits fell to Sh378.9 million from Sh484.4 million.
Besides land rates, parking fees, UBPs and billboards and advertising are the other big revenue streams for the devolved unit.
Increased collections are critical to boosting the county’s efforts of avoiding a near paralysis of operations whenever the National Treasury delays in remitting the equitable share to counties.
Dismal internal revenue collections since the start of devolution in 2013 have forced all 47 counties to overly rely on the equitable share to run operations. Delays in the release of this cash have in the past affected operations.
This is the second time that the county has raised more than Sh2 billion in its own source revenue in the first quarter of a fiscal year, with the other time being in 2017 when it clocked Sh2.04 billion.
But despite the growth in the collections in the first quarter of this financial year, Nairobi has been singled out for grossly mobilising revenues way below its potential.
The Own Source Revenue Potential and Tax Gap study puts the potential of Nairobi County at Sh25 billion in a financial year, which is nearly double the current collections.
The study, jointly done by the World Bank and Commission of Revenue Allocation shows that all the 47 counties are grossly under-collecting internal revenues largely due to weak systems, use of manual platforms and corruption.
