E-citizen services, parastatal cash mop-up raises Sh129 billion

According to a senior finance ministry official, revenues were largely increased by flows of “excess funds from semi-autonomous government entities, revenues from e-citizen service provision and investment income (dividends).

Non-tax revenues for the period under review were Sh53.94 billion higher than the original projections of Sh75.33 billion at the beginning of the previous fiscal year.

The revenues are part of the government’s aid financing. These are revenues collected directly by the agencies through service charges and donor subsidies.

Services such as transportation permits such as driver’s licenses, land titles and registration of persons are important sources of non-tax revenue. The other sources are royalties, investment income and fines and forfeitures.

In recent years, the government has moved its services to the online portal e-Citizen to improve efficiency and close loopholes that prevent bribery and other forms of corruption.

Some key state departments and agencies that have moved most of their services to e-Citizen include: Immigration and Citizen Services Department, Kenya Revenue Authority, Business Registration Service, National Safety and Transport Authority, Competition Authority of Kenya and Kenya Ports Authority.

The non-tax wallet was further bolstered by dividend payments from companies in which the government has a stake. These include Safaricom — in which the Treasury holds a 35 percent stake — and Kenya Electricity Generating Company, which is 70 percent state-owned.

Other companies from which the Ministry of Finance receives dividends include KCB Group (about 17 percent of the shares), Kenya Reinsurance Corporation (60 percent of the shares), HF Group and NSE Plc.

Treasury also receives dividends from cash-rich entities such as the Central Bank of Kenya, the Communications Authority of Kenya, the Capital Markets Authority, the Competition Authority of Kenya, the Kenya Pipeline Company and the Kenya Ports Authority.

President William Ruto has also insisted that state-owned enterprises must surrender to the treasury any money they do not use in their accounts.

The president issued a directive in March that state-owned commercial enterprises should transfer a maximum of 80 percent of their net profits to the treasury. This directive has now been included as one of the performance indicators for CEOs for this fiscal year ending in June 2025.

“The money that some parastatals make does not belong to their boards or management. It belongs to the people of Kenya as return on investment,” Dr Ruto told the parastatal chiefs.

The clearing of excess cash in the parastatals is expected to partially alleviate the Ministry of Finance’s liquidity problems in some months, which have forced it to borrow through T-bills and bond sales. The surpluses are comparable to the profits of the state-owned enterprises and represent the balance between their after-tax income and expenditure.