Non-tax revenue hits 3-year high of Sh29bn on mop-up

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The National Treasury building in Nairobi in this picture taken on March 15, 2023. PHOTO | DENNIS ONSONGO | NMG

Non-tax revenue raised from the use of government services, fines, and mop-up of surplus cash in parastatals has reached the highest levels in three years ahead of a fresh push to increase the cost of obtaining critical documents like passports, marriage and death certificates, the latest official figures show.

The non-tax cash receipts increased 6.64 percent to Sh29.69 billion in the first four months of the current financial year compared with a similar period in the prior year, provisional data from the Treasury indicates.

The growth in the review period is the first since 2020 when the government increased the mop-up of excess cash in State-owned enterprises to help mitigate a cash crunch that followed the onset of the pandemic.

This came on the back of an order by President William Ruto that all payment for government services—the bulk of which are offered on e-Citizen—should be done through a single pay point managed by the Treasury.

The move is aimed at giving the Treasury sight of all government payments for better liquidity management and avoiding unnecessary short-term borrowing by one agency when another arm of the government has surplus cash.

Services such as transportation permits like driving licences, land titling, and registration of persons are key sources of non-tax revenue. The other sources are royalties, investment income as well as fines and forfeitures.

The government has in recent years been moving services to the online portal, the e-Citizen, in a bid to improve efficiency and seal loopholes for bribery and other forms of corruption.

The non-tax revenues for the July-October 2023 period show the inflows were ahead of the Sh25.11 billion prorated target by 18.25 percent, or Sh4.58 billion.

The Treasury has budgeted for Sh75.33 billion from the non-tax receipts this financial year ending June 2024, which is Sh7 billion less than the previous year.

The goal for this fiscal year is Sh7 billion less than the Sh82 billion collected in the previous year ended June 2023.

The Treasury last fiscal year ended June 2023 surpassed the goal it had set for non-tax revenue by nearly Sh16.44 billion after netting about Sh82.00 billion, according to the latest statistics from the government’s main account.

The over-performance was largely been attributed to aggressive mopping up excess cash in parastatals, increased digitalization of services of government services and payments, and more than projected dividend flows from firms like Safaricom where the Treasury has shares.

“The above-target performance is a result of investment income (dividends from GoK investments), surplus funds from Semi-autonomous Government Agencies (SAGAs), and revenues arising from service provision collected through e-citizen,” Albert Mwenda, the Director-General for Budget, Fiscal and Economic Affairs at the Treasury, told the Business Daily in July.

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