Counties

Counties raise Sh4.5 billion from business permits


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Council of Governors Chairperson, Anne Waiguru joined by other governors addressing the media at the Council’s offices in Nairobi. FILE PHOTO | DENNIS ONSONGO | NMG

Counties’ revenues generated from issuing business permits increased by 21.7 percent during the past financial year, pointing to improved resumption of business operations in the country from the impact of the Covid-19 pandemic in 2020.

The revenues from business permits increased by Sh795.8 million to Sh4.47 billion that the 47 counties collected in the fiscal year ended June 2023, Treasury’s report of consolidated financial statements for county governments shows. 

Read: Non-tax revenue hits 3-year high of Sh29bn on mop-up

In the 2021/22 financial year, the 47 counties generated Sh3.67 billion from issuing business permits, a period when the economy was still recovering from effects of the Covid-19 pandemic.

The Treasury, in a report on consolidated financial statements for county governments for the 2022/23 financial year, notes that several counties have their own revenue administrations, which is resulting in improved collections.

“A number of county governments now have their own county revenue authorities which have revamped revenue collection strategies. These county governments include Kakamega, Kiambu, Laikipia and Meru,” Treasury notes.

The Treasury said the data from counties indicate that much of their own source revenues relate to fees from business permits and vehicle parking fees.

Read: Only four counties meet own-source revenue target

The counties in 2022/23 generated Sh3.8 billion from sign boards and advertising fees (a 5.9 percent increase from 2021/22), Sh2.29 billion from cess (a 10.3 percent increase from 2021/22) and Sh2.09 billion as receipts from sale of agricultural goods (an increase of Sh469 million from 2021/22).

Parking fees generated Sh2.6 billion and public health facility operations Sh3.39 billion, the two being among top revenue generating avenues for devolved units.

“Business permits, health facilities, rates and parking fees are the economic items generating substantial revenue for the county governments. These streams account for 71 percent of total own source revenue generated by county governments in FY 2022/23,” Treasury stated.

While not among the top 10 revenue generators, revenues earned by counties from licensing of liquor businesses increased by a high margin of 16.2 percent to Sh676.3 million, pointing to a possible resumption of entertainment businesses that sell alcohol in the country, as the economy recovers.

The Controller of Budget (COB) in 2022/23 reported that own-source revenue for counties during the financial year was Sh37.8 billion, which was a 5.3 percent improvement from the Sh35.9 billion that counties generated from their own sources in 2021/22.

“The OCOB recommends that the forty-four counties that did not achieve their OSR target should develop strategies to ensure the target is realistic and achievable in the next financial year to avoid pending bills in the coming financial year,” the COB stated in the county governments’ budget implementation review report for 2022/23. 

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