City Hall revenues rise by Sh2.3bn in nine months on higher taxes

Governor Johnson Sakaja during the State of the County Address at Nairobi City County Assembly on April 4, 2024.

Photo credit: Lucy Wanjiru | Nation Media Group

City Hall’s internal revenue in the nine months to March grew by Sh2.3 billion, setting Nairobi County on course for improved collections this financial year.

Latest data from the county show City Hall raised Sh9.34 billion, a 32 percent jump from Sh7.12 billion in similar period last year with significant increments in single business permits (SBPs), building permits and land rates.

The growth comes when City Hall increased many charges, including parking fees and market rates and widened the tax base on those paying land rates to raise internal collections.

The highest amount that City Hall has collected in internal revenues in a full financial year since the start of devolution is Sh10.9 billion in the year to June 2019.

“We are on course to collect the highest revenue this financial year due to the measures that we have introduced,” Governor Johnson Sakaja recently said of the performance in the nine months. “Our OSR (Own Source Revenue) has been on a steady rise. We expect sustained growth going forward and in the coming months".

Collections from SBPs jumped highest to Sh1.79 billion from Sh1.29 billion, a rise of 38.7 percent followed by building permits which jumped 33 percent to Sh0.917 billion and land rates that rose 21 percent to Sh2.63 billion.

SBPs, land rates and parking fees are the three leading revenue streams for City Hall, accounting for at least 57 percent of the collections every financial year.

City Hall made it compulsory for residents who own apartments within blocks and share common areas within the apartments to start paying rates from January this year. The rates are based on the size of the unit and its location.

The county also increased licence fees on a raft of business permits and also introduced an annual certificate of Sh10,000 for water bowsers. Motorists have since September last year been paying Sh300 to park in the central business district up from Sh200.

But despite the significant increase in internal revenue collections, residents and businesses in the city continue to grapple with billions of shillings in debt owed to contractors, poor service delivery like bad state of roads and healthcare.

City Hall tops all the counties in pending bills with Sh106.88 billion unpaid to contractors as of December last year. The county has also defaulted a loan at KCB Group, which has since crossed the Sh4 billion mark on penalties and interest.

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Note: The results are not exact but very close to the actual.