Kisumu cracks down on Sh100m fake business permits syndicate
Kisumu City Manager Abala Wanga.
The Kisumu county government has uncovered a syndicate behind the production and sale of fake single business permits that cost the county an estimated Sh100 million in lost revenue annually.
According to Kisumu City Manager Abala Wanga, the fraudulent permits are being generated in cyber cafes across the city and sold to unsuspecting and complicit traders operating in various markets across the county.
In some cases, county revenue officers are allegedly colluding with the syndicate, generating the permits within their offices, concealing them in the county system and selling them at discounted rates.
“It is worrying to see so many people trading in this city without valid licenses. This is a serious concern that will no longer be condoned. Some traders display photocopied permits across multiple premises, while others present licenses unrelated to their businesses such as a hotel owner using a hardware permit,” Mr Wanga said.
He warned that traders found in possession of fake permits, or those who have not renewed theirs, have one week to comply or risk paying double the fee or having their businesses shut down.
A crackdown began last Wednesday with enforcement officers flagging non-compliant businesses and issuing seven-day warnings.
The Chief Executive Officer of the County Revenue Board, Phillip Adundo, estimated that approximately 30 percent of the expected revenue from Single Business Permits is being lost due to these fraudulent activities.
“A genuine license is edited in a cyber cafe to reflect the trader’s business and then it’s displayed as authentic through collusion between revenue officers and unscrupulous traders,” said Mr Adundo, showcasing confiscated fake permits, some already framed and hung in business premises.
Rural sub-counties are the most affected, with Ahero identified as a hotspot for fake permits.
Mr Adundo explained that timely and legal payment of business licenses is essential for the county government to provide services and implement development programs.
He also asked traders to avoid paying in cash.
“This is a vice we want to eliminate. Kisumu County has adopted a cashless system and wee advise traders not to pay cash for any fees whether it’s parking or market dues. Such transactions are fueling this malpractice. Use mobile money instead,” he said.
So far, the county has collected Sh1.8 billion in Own Source Revenue (OSR) against a target of Sh2.1 billion. Specifically, for Single Business Permits, the county has collected about Sh200 million out of a targeted Sh300 million for the financial year. The estimated loss of Sh100 million due to fraud suggests the county may not meet its revenue goals.
The county government is also pursuing rogue revenue officers suspected of enabling the scheme.
“Don’t be misled by any county official claiming they can help you bypass the system. We are tracking down these officers who are facilitating the siphoning of public funds,” said the county’s Finance Chief officer Martin Opiyo.
The Commission on Revenue Allocation (CRA) estimates that Kenya’s 47 counties have the potential to generate up to Sh260 billion annually from own-source revenue streams such as land rates, business permits, parking fees and market charges.
However, widespread fraud and mismanagement continue to undermine these targets.
In a related development, Kisumu County has raised the alarm over illegal billboards erected on public spaces and walkways within the city.
According to Mr Wanga, many billboards have been installed without proper licenses or planning approvals and some pose safety risks due to poor workmanship.
He cited a recent incident in Kondele where a poorly installed billboard collapsed during heavy rains, nearly causing fatalities.
Some billboards, he said, were approved under dubious circumstances, including forged approvals or invoices that understate their actual size, undermining the County Finance Act.
The county has given billboard owners seven days to regularise their installations with proper documentation or face removal.