Cash generated by the government from non-tax sources such as fees for services as well as mopping up of surplus money from parastatals more than four-fold in the first two months of the year, new data from the National Treasury shows.
Non-tax revenue for July and August totalled Sh17.63 billion, the Treasury said in monthly disclosures, a 445.38 percent jump from Sh3.23 billion in the same period last year.
The highest non-tax revenue in the period under review came on the back of a push by lawmakers for greater scrutiny of how ministerial appropriations-in-aid (A-i-A) are collected and spent by various state agencies amid increased digitisation of government services.
Ministerial A-i-A is revenue collected by various Ministries, Departments and Agencies (MDAs) in the provision of services and spent at source after appropriation by the lawmakers.
“The Committee noted with concern that Appropriations-in-Aid comprises a substantial component of financing for the national government amounting to approximately Sh400 billion in the proposed budget for the financial year 2024/25,” the Budget and Appropriations Committee wrote in a supplementary budget report in July after the Finance Bill 2024 collapsed.
“However, agencies with a mandate to collect the A-i-A have continued to underestimate their A-i-A targets during budget approval only to seek an upward review during supplementary estimates. This continues to reduce accountability and prudence in the use of AIA which is a form of revenue collected from taxpayers.”
Some of A-i-A receipts are the Road Maintenance Levy charged at Sh25 per litre of petrol and diesel, the Railway Development Levy at 1.5 percent of the value of imports, the Housing levy at 1.5 percent of gross personal earnings matched by employers, the Petroleum Development Levy and university fees.
Services such as transport permits such as driving licences, land titling, and registration of persons are also key sources of non-tax revenue. The other sources are royalties, investment income as well as fines and forfeitures.
President William Ruto has also been adamant that state-owned entities must surrender idle cash in their accounts to the exchequer. The president followed this up with a directive in March that commercial state corporations should wire up to 80 percent of net profit to the Treasury, an order that has now been included as one of the performance indicators for chief executives this financial year ending June 2025.
“The money that some parastatals make does not belong to their boards or management. It belongs to the people of Kenya as returns on investment,” Dr Ruto told parastatal chiefs at State House on March In recent years, the government has been moving services to the e-Citizen online portal to improve efficiency and close loopholes for graft and other forms of corruption.
Key state departments and agencies that have moved most of their services to e-Citizen include the Immigration and Citizen Services Department, Kenya Revenue Authority, Business Registration Service, National Transport and Safety Authority, Competition Authority of Kenya and Kenya Ports Authority.
Non-tax revenue sources generated Sh129.27 billion in the year ended June 2024, a 57.65 percent increase from Sh82 billion in the previous year.
