Six out of 47 counties will be required by law to contract the Kenya Revenue Authority (KRA) for revenue collection if a new proposal is adopted.
The six, which are classified as devolved units with “relatively high revenue” are Nairobi, Mombasa, Kiambu, Narok, Nakuru, Kisumu, Machakos and Nyeri.
“It would be easier for KRA to collect revenue from more urbanised counties with large formal sectors; this would allow KRA to fully apply its professional skills, personnel and technical resources,” says the Treasury in a draft national policy to support enhancement of county revenue.
The proposed national policy and legal framework has been created by an inter-agency committee drawn from the county and national government teams.
It contains radical reforms to broaden county tax bases while strengthening revenue administration capacities.
For a brief period, KRA collected local revenue for the defunct City Council but this was prematurely terminated.
Kiambu has an MoU with KRA to collect property rates, land rent and SBP. Park entry fees, the largest revenue stream in Narok, is being collected by KAPS, a private firm.