City Hall: Vendors Collect Revenue Despite Kshs1.2 Billion Data Centre

• House committee queries why KRA used a non-gazetted module to collect revenue for NMS

By Adieri Mulaa

Kenya Revenue Authority is at the centre of a dubious revenue collection system at City Hall that is shrouded in a mystery.

The national tax authority introduced Nairobi Revenue System, an electronic module, to collect revenue for Nairobi Metropolitan Services on behalf of the County Government.

Last week, Nairobi county assembly Committee on ICT was told the NRS module is not gazetted, a requirement for such electronic systems to be offered as solutions.

“Soon as the Committee raised the matter, I consulted with the County Director of Revenue and realized that NRS was not gazetted”, Chief Officer Finance, Joseph Gathiaka told the Committee.

He added: “It was a big oversight but we shall look into how we can correct that anomaly”.

The House committee wondered why City Hall uses vendors to collect revenue yet the county government had invested over Kshs 1.2 billion in a data centre funded by the World Bank, with modern ICT equipment.

These revelations surfaced when the acting County Executive Committee Member for Finance Lawrence Wambua, his ICT counterpart Newton Munene and top officials from the two sectors appeared before the House committee on Wednesday 30th November, 2022.

The NMS contracted KRA as the principal revenue collector when it took charge of some key functions of Nairobi county government that were transferred to the National Government for two years, in a deal spearhead by President Uhuru Kenyatta to improve service delivery.

However, the county officials failed to disclose how much revenue the system modules in use were collecting and the projected collections.

They also technically evaded any blame regarding the NRS module saying they inherited it from the NMS.

“The governor is aware about this revenue system because he was taken through by KRA and he thought it was good enough for our collection process”, Mr Wambua said.

The Committee chaired by Kawangware MCA Fredrick Njogu is interrogating authenticity of the NRS module that was used by KRA to collect revenue for NMS.

It also seeks to establish how much revenue the system had collected progressively while under the NMS regime and currently under the county government, plus its projected daily collections.

But senior officials from the County Treasury and the ICT sector told the Committee they do not know where servers for Nairobi Revenue System were being hosted.

The lengthy session was treated to a light moment when Mr Munene, the ICT Executive Committee Member, said the NRS servers were hosted in the cloud.

Chairman: Chief Officer, where are the system servers?

Mr Munene: The servers are hosted by either KRA or the National Government but we do not know exactly where. In a meeting held in September (2022), we asked that question and we were told the servers are hosted in the cloud.

A Mr Wamae, an officer from KRA was mentioned as the system administrator for the NRS module.

The county legislators questioned whether user contracts for the NRS module were signed, about CR12 documentation regarding details of the company directors and authenticity of the revenue collection system.

Kileleshwa MCA Robert Alai, a member of the ICT Committee, unleashed a salvo when he asked Mr Wambua to confirm whether the NRS module being used by the Nairobi County government was gazetted as a revenue solution.

Alai put it to the county Finance minister that for any solution to be offered by the National or County government, it must be gazetted.

Interestingly however, the NMS whose two year – term lapsed after the August 9, 2022 General Election has already handed over to the county government all functions which had been transferred.

Mr Wambua said before KRA came on board, the county government used the Local Authority Integrated Financial Operations Management System (LAIFOMS), Jambo Pay and NBK for revenue collection.

The Committee heard that currently, the county government was rebranding to Nairobi Pay as the new module for revenue collection.

Mr Munene told the Committee the county officers are unable to determine the capacity of NRS solution because they cannot see the back end of the system since KRA still controlled the servers.

The NRS was initially introduced in Nairobi county as a pilot project on the understanding that it would be rolled out to the rest of the counties, the committee was told.

“To customize our needs, we have been given a leeway to give our unique needs which are not in other counties”, said Gathiaka.

In a warning shot, Kangemi MCA Hamisi Maleya noted that if the Executive and the County Assembly do not start on the right footing, the county government was bound to fail Nairobi residents in terms of anticipated service delivery.

The Committee has directed the county executive to table contract documents for all vendors dealing with automation and digitization of revenue collection.

It has also summoned Kenya Revenue Authority to shed light on the NRS servers among other concerns raised by Members about the revenue module.

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