City Hall spares Nairobians from tax increases

Mr Jimmy Kiamba, suspended Nairobi County chief finance officer. PHOTO | FILE  

By KIARIE NJOROGE. City Hall official seeks out-of-court tax deal with KRA

Nairobi residents and businesses have been spared an increase in taxes and licence fees, as City Hall said it would shift its focus to raising its revenue collection efficiency to finance its Sh30.8 billion budget.

Finance Executive Gregory Mwakanongo in his budget speech on Tuesday indicated that City Hall would freeze any pay rises for county staff to curb growth of the wage bill that continues to consume more than half of the county’s finances.

“In consideration of the high cost of living, the county will not be seeking to increase any fees and charges in the fiscal year 2015/16,” said Mr Mwakanongo.

“We will focus on enhancing internal efficiency and effectiveness in revenue management as well as identifying new revenue streams.”

The county will receive Sh13.4 billion from the central government and expects to raise the remaining Sh17.4 billion from other sources like parking, land rates and permit fees.

City Hall has in the past two years struggled to fund its budget resorting to drastic cuts in the development allocation towards the end of each financial year.

Last month, the County Assembly slashed the development figure by Sh2.5 billion to Sh6.8 billion leaving a lot of projects with no funding.

The County Budget and Appropriations Committee last week said that it had insisted that the trend be halted directing that all funds allocated for development should be spent as planned.

“It is not the anticipation of the law that the 30 per cent PFM (Public Finance Management Act) threshold for development funds should be arithmetic but rather should be based on the ability of the sectors to absorb the allocated funds,” it said.

City Hall has allocated Sh19.81 billion for recurrent expenditure and Sh11 billion for development. Transport and Infrastructure will get the bulk of the development funds at Sh6.2 billion, with health receiving Sh1.76 billion.