How Kang'ata collected more revenue without increasing tax

Murang’a County Government introduced staff incentives, sealed revenue loopholes, and learned from the best to double its own source of revenue to Sh1.1 billion in the last financial year.

Governor Irungu Kang’ata revealed the county had innovated various strategies to reduce expenditure from Sh1.4 billion to Sh1.1 billion without increasing tax. 

For the financial year 2024-2025, Kang’ata aims to collect Sh1.2 billion through enhanced own-source revenue collection.

In an interview, he stated that his administration employed various intervention programmes to raise revenue through holding strategic conferences for revenue collection staff, featuring guest speakers with financial knowledge backgrounds.

“In 2022-2023, we collected Sh523 million, followed by Sh658 million in 2023–2024. This year, despite the Sh1.2 billion target, we managed Sh1.1 billion,” said the governor.

Kang’ata added that Murang’a has not increased any charges or taxes since 2018, as his administration managed to seal all the loopholes that could have been exploited in the diversion of public resources.

By June 30, Murang’a was ranked by the Controller of Budget as having collected Sh1,116,610,694, surpassing the set target of Sh1,115,000,000.

During the period, in March, revenue collectors achieved the highest collection of Sh171 million, while February saw the lowest with Sh116 million.

Kang’ata said in the 2023–2024 fiscal year, the county government generated significant revenue from various sources, including NHIF/Kang’ata Care claims of Sh251 million and single business permits of Sh245 million.

The Lands Department generated Sh156 million, hospital fees contributed Sh131 million, and liquor licenses earned Sh97.4 million. Boda boda riders paid Sh5.9 million, and tuk-tuk operators paid Sh1.9 million. 

The least contributor was library services, generating Sh23,000, Mareira Farmers Training Institute in Kigumo, despite its high potential, raised only Sh25,000 followed by weights and measures at Sh300,900.

Bar owners have complained about high charges, but the county denies the claims. 

"Our liquor establishment charges are competitive. In fact, bar owners took us to court and lost. They were told to pay us the costs of the suit. The court agreed with us we followed the law. In fact, it is far much better they pay as per our rates as opposed to other counties where they are being pushed to close up like Nyeri", County Secretary Dr Newton Mwangi said.

The governor attributed the increase in revenue to the automation of the payment process, which stopped revenue leakage. “There is also the goodwill of Murang’a residents who have paid for services effectively. The top revenue officers would be rewarded with a trip for their role in achieving the Sh1 billion target,” said Kang’ata.

Due to staff motivation, revenue collection has been on the rise over the past two years. After assuming office, Kang’ata's administration invited officials from Laikipia and Kirinyaga counties, which had excelled in revenue collection in 2021/2022.

"The tips and research conducted by my team, led by Finance and Planning CEC Prof Kiarie Mwaura and Chief Officer Ms Judy Mbaru, resulted in the best performance in 2022/2023 and 2023/2024," he said. 

The success in revenue collection also followed the employees' understanding that the county government was spending 46 per cent of the budget on wages, above the recommended 30 per cent by the Controller of Budget. 

“Employees also understand that failure to raise revenue may mean we have to lay off employees to comply with the CoB ratio, an option we do not want to exercise,” said Kang’ata.

He added that the county government motivated employees by transitioning them to contract terms after years of casual service. 

Revenue collected across the nine sub-counties is channelled towards implementing ward projects, smart cities, procurement of drugs, and support for water companies, among other community-driven programs.

These resources also support the youth through the Murang’a Youth Programme (MYS) and the construction of the Kenneth Matiba Level Five Hospital in Makeji, saving the government Sh14.6 million annually in rental costs.

The county government has announced that Kenneth Matiba Level Five Hospital will open on July 20. 

One of the vibrant programs initiated to impact the Sh1 million residents is the Inua Mkulima programme, which provides subsidies to farmers involved in dairy, mango, and avocado value chains. 

As Murang’a reaches its revenue target, several counties, including Mombasa, Nandi, and Kiambu, have sent their revenue collection teams for benchmarking.

A resident, Peter Mwai, noted that the improvement in collection proves employees are fulfilling their responsibilities.

“The government should ensure that health facilities, especially those in rural areas, are well-stocked with drugs,” said Mwai.