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Mombasa goes digital to nab rates defaulters

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A section of Mombasa. FILE PHOTO | NMG 

The Mombasa county government has launched a digital platform that will help track defaulters who owe the county millions of shillings in unpaid land rates.

Work on the digital network began in earnest last Friday with the installation of metallic labelling plates on all buildings in the city for ease of monitoring.

The plates have quick response (QR) codes with information on the buildings.

The range of information in the QR codes includes the plot number, name of building owner, status of land rates payment and when the building was last painted.

Edward Nyale, the county Land Executive, said the current manual system of information management had made it difficult for the county government to track down land rates defaulters.

In March, the number of defaulters in the county stood at 30,000, but Mr Nyale said that number had significantly reduced in recent weeks as a number of property owners rushed to make payments ahead of the digital system launch.

“With the QR code our officers will be able to know the land defaulters and deal with them according to the law. We are using technology to consolidate most of our services to ease our work,” he said.

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Transport, Infrastructure and Public Works Executive Tawfiq Balala, whose department is working with the Land counterparts to establish the digital platform, said the system will be fully operational in two months’ time.

Mr Balala said that will happen when ongoing labelling of buildings in the central business district (CBD) is done.

The labelling is being done using numbers and street names.

The initial phase of the programme will cover the CBD starting with the main roads such as Moi Avenue, Digo Road and Nkrumah Road. “It will be of no importance if we let the new look fade away without maintaining it. Our aim is to make Mombasa the most beautiful city in Africa,” Mr Balala said.

Building owners are now required to paint them in November of every even year, meaning that the next round of painting should happen in 2020.

Mr Balala said the beautification programme will be done alongside introduction of a Bus Rapid Transit (BRT) system that should help de-congest the city.

The Mombasa county government in March ordered owners of residential and commercial buildings in the CBD to paint them white and blue. The property owners were also required to clean and refurbish all walkways near their premises.

Constructors have been repairing the pavements with red bricks, and the county government has announced that such paths will in future be paved with blister tactile surface.

The purpose of the blister surface is to provide a warning to visually impaired people, who find it difficult to know where the footway ends and the carriageway begins.



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Lights, camera, action! Artistes brighten economy

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Covid-19 had negatively impacted entertainment revenues.

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KRA must ease tax filing to boost revenues

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Nikhil Hira Independent tax consultant and Director Bowmans Coulson Harney (law firm). [Courtesy]

Anyone who has been following Kenya’s budgets over the last few years will recall headlines each year saying that the country has set its largest-ever budget. 

The upcoming 2021/22 fiscal year is no exception, with Treasury Cabinet Secretary Ukur Yatani announcing a budget of Sh3.6 trillion – yes, the biggest ever! A little over Sh2 trillion will come from government revenues, with approximately Sh1.8 trillion of this from tax revenues. 

The balance will be borrowed – another common feature of the last few years. 

This year’s budget comes amidst an economic crisis brought on by the Covid-19 pandemic, with the inherent assumption that the pandemic will come to an end before the start of the next financial year. 

Given surges in infections that are being seen globally, and indeed in Kenya, this assumption may well be the deal-breaker. 

The Ministry of Health has already said that Kenya may see another wave of infections in July, fuelled by the Indian variant. This could result in more lockdowns with the associated impact on the economy and indeed revenue collections. The lack of vaccines is an issue that the government must address as a matter of great urgency if the country is to get through the pandemic without further economic woes. 

While deficits in government budgets are not uncommon, Kenya seems to be annually widening the gap between expenditure and revenues. 

If one applies this model to their household budget, the upshot will almost certainly be bankruptcy. 

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What is actually required is curtailing recurring government expenditures, which is something that the government has acknowledged in the past with proposed austerity measures. 

The reality is that Kenya has not succeeded in doing this, and the pressure on revenue collection is exacerbated. 

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When you add to the high level of wastage and corruption we are witnessing, the deficit will almost certainly continue to widen. 

The responsibility for tax collection and enforcement lies with the Kenya Revenue Authority better (KRA). 

There is no doubt that the authority has improved significantly in this task since it was set up in 1995. 

The taxman estimates that 4.4 million tax returns were filed by June 30 last year, up from 3.6 million in the previous year.  While this is a significant improvement, when compared to the country’s population, this number of returns seems unusually low. 

The increase in the number of tax returns, is to a large extent, due to the online reporting system, iTax, and a major push by KRA through taxpayer education.

There is no doubt that the online system has made filing tax returns significantly easier and gone are the large queues of people witnessed at Times Tower on deadline day. 

That said, there is still much to be done to make filing returns a seamless and painless exercise. 

System downtime during filing periods is something that all of us will have experienced, although, in typical Kenyan fashion, we inevitably wait until the last day to file our returns as we do with most things! 

The spreadsheet that one uses to file a return is by no means the simplest to use.  One key issue seems to be that taxpayers are not alerted to changes in the model until they try to upload a return. 

The spreadsheet does not allow one to make it more relevant to their sources of income – in essence, it is too rigid and inflexible. KRA should be able to rectify this without too much effort.

Last year was unusual in that different rates of tax were applicable in the first quarter as compared to the rest of the year.  This followed the Covid-19 relief measures that were introduced in April 2020. 

There was much debate about whether the changes were meant to apply for the whole year or whether some form of apportionment was needed. 

In the end, the decision was made for apportionment. One can argue about what the correct treatment should be, but the issue was how long it took for the decision to be made and, indeed, to amend the iTax system. 

The age-old notion has always been that the more complex and difficult it is to file a tax return, the more likely it will be that taxpayers simply won’t file their returns. While the issue with the system has been resolved, there is an inherent administrative issue here that must be addressed. 

KRA has to be significantly more proactive in dealing with changes in rates and law to ensure the least inconvenience to taxpayers. 

The writer, Nikhil Hira, is the Director of Bowmans Kenya.

The views expressed in this article are the author’s and not necessarily those of Bowmans Kenya  

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The age of gentrification is truly upon our country

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Never mind the businessmen outside Nairobi could be richer. Rural folks aspire to one day moved to a new county (city).

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