Home Business Nairobi County goes after property owners to fund Ksh 40B budget

Nairobi County goes after property owners to fund Ksh 40B budget

Of the total expenditure, recurrent expenses will amount to Ksh 28.8 billion while development expenditure will amount to Ksh 11.9 billion.

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Property owners in Nairobi City could see significant rise in rate charges as part of news measures the county government is seeking to introduce in order finance its Ksh 40.7 billion 2023/24 budget.

While presenting the FY2023/24 budget before the County Assembly on Thursday, Nairobi City County Government Finance and Economic Planning County Executive Committee Member Charles Kerich said the county plans to introduce new measures that will help the county collect Ksh 19.99 billion as local revenue with the remaining Ksh 20.7 billion coming from the National Government transfer.

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Of the total expenditure, recurrent expenses will amount to Ksh 28.8 billion while development expenditure will amount to Ksh 11.9 billion.

“The allocation of development is equivalent to 30pc of the total budget, which is in line with section 107 of the Public Finance Management Act 2012, which requires at least 30pc to be allocated to development,” said Kerich.

The county is planning to raise additional Ksh 1 billion from the property market by introducing sectional property rates targeting individual houses on a block of apartments and completing and capturing Geographical Information System (GIS) to boost land rate collection.

“Land rates are currently charged based on the 2019 valuation roll. The number of ratable properties is expected to increase from the current 181,000 to approximately 241,000 properties,” said Kerich.

Property owners in the county will also pay environmental levy charge capped at 2pc of the annual property rates.

The city county is also planning to restructure the single business permit codes which will categorize businesses as either hyper, mega, large, medium, small or mini in order to enhance fairness and compliance.

Kerich said the move will cut the rate of default especially among small businesses and help raise additional Ksh 1 billion in revenue.

Other tax administrative measures and tax policy reforms proposed by the county finance department include reduction of originating and terminating charges (seasonal tickets) for PSVs terminating outside CBD with the potential of increasing the collection, regularisation of unauthorised developments and imposition of penalties for the same and increasing charges on betting shops and pool table joints which will also control betting activities and enhance revenue.

In terms of allocations, school feeding programme also known as Dishi na County introduced recently by Nairobi County Governor Johnson Sakaja and which targets to encourage high attendance of school-going children within the county will receive the largest share of allocation at Ksh 1.7 billion out of which Ksh 1.2 billion will be used to procure food to feed at least 250,000 in the current financial year while Ksh 500 million has been allocated for construction of additional kitchens and serving sheds.

The city’s infrastructure sector will receive allocation amounting to Ksh 1.5 billion, out of which Kshs 1.1 billion has been earmarked for the construction, rehabilitation and maintenance of roads and bridges and Ksh 400 million for street lighting installation and maintenance in order to enhance security in the estates.

The health sector on the other hand will receive a large allocation amounting to Ksh 1.4 billion out of which Ksh 400 million has been set aside for purchase of pharmaceuticals and non-pharmaceuticals and Ksh 1 billion for construction, rehabilitation, and equipping health facilities.

In order to promote talents skills development and care, the Nairobi County plans to spend Ksh 772 million for school bursaries and Ksh 100 million for the construction and rehabilitation of ECDs and vocational training centres.

Sports culture and arts sector has been allocated Ksh 520 million, environment, water and natural resource Ksh 1.6 billion and trade Ksh 1.1 billion.

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