The County Government of Nakuru is enforcing accountability and fiscal discipline in the management of its resources to deliver better services and enhance equitable economic development.
Governor Susan Kihika indicated that her administration was working on various policies to facilitate smooth business operations in addition to enhancing the county’s revenue-generating capacities, enabling it to deliver essential services efficiently and sustainably.
Kihika pointed out that the County’s Own Source Revenue (OSR) had improved with Sh 1,188,113,228 collected in first half of the Financial Year 2023/2024 compared to the same period the previous year with a collection of Sh1,183,177,773, which she said was an improvement of 18 percent.
In a statement outlining her scorecard for the past one year, governor Kihika emphasized the importance of devolution in driving local economic growth, but noted that counties needed financial independence, to reach their full potential.
Kihika explained that she had overseen enactment of the Nakuru County Finance Act 2023 and passing of the Valuation and Rating Bill by the County Assembly which set out the basis of enhancement of Own Source Revenue to avail needed resources for improved service delivery.
“The Nakuru County Finance Act 2023 is critical to the generation of own-source revenue and concentrates not on increasing levies, but on expanding the tax base,” stated the governor.
According to her, the decision to expand tax brackets, implement an enhanced revenue collection framework, and increase human resources has been a massive game-changer. She called on residents and businessmen to pay taxes to enhance service delivery.
The Governor disclosed that she had provided a waiver for unregistered property owners with titles of more than five years and that her administration had approved a 25 percent reduction of charges for boda boda operators who now pay Sh 300 per month each.
The County boss at the same time, said they were enhancing own-source revenue (OSR) streams through the adoption of a cashless mode of payment, the installation of CCTVs in key revenue collection points, and deploying a vibrant and dynamic workforce.
While noting that Counties were collecting less revenue than their potential due to poor systems and leakages, Kihika reiterated her Administration’s resolve to seal all the loopholes that interfere with the optimal use of the revenue generated.
She listed some of the revenue streams being enhanced including property tax, building permits, business licenses, liquor licenses, vehicle parking fees, and outdoor advertising.
Governor Kihika also affirmed that the County Government was determined to ensure transparency in all the County Government’s financial dealings, which she said will enhance the purpose of devolution by taking public finances closer to citizens in a manner that would allow them to have a say on how county budgets are planned for and used.
“We are committed to complying with the Constitution and the 2012 Public Finance Management Act, which require each of Kenya’s 47 counties to publish information during the formulation, approval, implementation, and audit stages of the budget cycle,” said Kihika.
She affirmed that she will ensure timely generation of both budget estimates and implementation documents so that citizens could hold the County Government financially accountable, adding that making documentation against which accountability could be gauged was a right for Kenyans.
The Governor, however, stated that the County Government was working on an Integrated County Revenue Management System, including digitizing land and property records, which she said was critical in enabling the County to optimize its revenue potential.
A tax Gap Impact Report by the Commission of Revenue Allocation (CRA) and the World Bank estimates that Nakuru misses out on an estimated Sh1.985 billion annually of its internal revenue potential.
Counties are run on cash transfers from the national government and Own-Source Revenue (OSR) in the form of taxes, charges, loans, and grants. Between 2013 and 2023, counties’ OSR was extremely low, accounting for less than 15 per cent of their budgets, implying overdependence on transfers from the national government.
According to the Commission on Revenue Allocation (CRA), in the financial year 2022/2023, the average revenue generated by all counties from their own sources was about one-third of their potential, which points to vast unexploited counties revenue.
A study by the Commission on Revenue Allocation (CRA), estimated the revenue potential of county governments at Sh215.6 billion, which is six times the actual collection in the past fiscal year.
By Esther Mwangi
