Nairobi MCAs Question KRA Commissioner About Agency's Role In City Revenue Collection

• Nairobi MCAs have been in an unending battle with Governor Johnson Sakaja over revenue collection in the city county
• KRA told the County Assembly ad hoc committee probing revenue collection queries that Sakaja asked the agency to assist in transitioning processes
• It was established that City Hall was funding an office domiciled at KICC, where KRA officials requested by Sakaja operated from

The Nairobi County Assembly Committee probing revenue collection queries has been told that the Kenya Revenue Authority (KRA) is still helping the city county collect revenue.

Nairobi revenue collection system raises more queries

The tax agency confirmed collecting revenue on behalf of Nairobi county courtesy of an agreement with Nairobi governor Johnson Sakaja.

On Friday, December 15, the committee got confirmation from KRA Deputy Commissioner Annastacia Githuba.

This revelation further bolsters the concerns that the ad hoc committee is probing. Nairobi Assembly Majority Leader Peter Imwatok is leading the committee.

A section of Nairobi MCAs, including Kileleshwa's Robert Alai, had raised concerns about the county's revenue collection approach and the transparency of the systems deployed.

Legal questions on the legality of the local arrangement between Sakaja's administration and KRA were raised.

KRA says Sakaja asked for help to collect revenue

KRA had played this role after the former governor, Mike Sonko, signed a deed of transfer that brought the Nairobi Metropolitan Services (NMS) into place.

The validity of the deed of transfer, however, ended in 2022.

During the Friday session, the KRA DC told the committee that Sakaja, on his own decision, requested that the commission provide nine commissioners to help transition the revenue collection process.

"Yes, we agree the deed of transfer ended, but Governor Sakaja requested KRA's help in the transition process. That is why we are still offering our services," Githuba told the committee.

The revelation puzzled the committee, with Imwatok noting that the assembly had not approved any extension and deeming the move an illegality.

"Madam Annastacia, as Members of this County Assembly, we did not approve such an extension. How come you decided to enter into an illegal MOU with Sakaja?" Imwatok asked.

Imwatok termed the move an illegality of the highest order that needs serious probing beyond just the ad hoc committee.

Nairobi revenue collection revelations stun MCAs

The committee was more startled when the commissioner indicated they were unaware of where the servers managing Nairobi's revenue allocation were domiciled.

"Currently, I can't confirm where the servers are, Mr Chairman," Githuba said, leaving the committee awestruck.

She said commissioners handling revenue collection are domiciled at KICC, with City Hall funding the offices.

Even more startling to the committee, Nairobi's Finance Chief Officer, Asha Abdi, who was also present, denied that City Hall was paying rent for the offices.

Nairobi MCAs have been lamenting that the county relied on a mysterious entity known as the Nairobi Revenue Service (NRS), controlled by an unknown individual, to collect its revenue despite the expiry of the agreement as a service provider in September 2022.

Documents previously tabled before the ad hoc committee indicated that the NRS contract by the Kenya Revenue Authority (KRA) expired in March 2022 but was extended for a further six months to September 2022.

After the expiration of the term of service in September, the taxman handed over the revenue collection function to the county.

Nairobi Revenue Services saga escalates

In September 2022, Nairobi Metropolitan Services officially handed over the transferred functions back to City Hall, putting Sakaja in complete control of the county's 14 functions.

In November of this year, the acting county secretary told the media that the county was in complete control of revenue collection using the NRS.

"NRS is an Integrated County Revenue Management System (ICRMS) conceptualised by the Intergovernmental Budget and Economic Council (IBEC), which is established under the Intergovernmental Relations Act (IGRA) 2012," he said.

On Thursday, December 14, the committee heard that the county was losing millions of shillings in revenue because of regular system failures.

The ad hoc committee resolved to re-invite KRA in January for more probing before the lapse of the 60 days it is legally allowed to do its work.

On Thursday, December 14, the committee members called for an immediate system overhaul to stem further revenue losses.

Nairobi was among the counties the Ethics and Anti-Corruption Commission (EACC) had listed for revenue illegalities and possible diversion of funds.