Just recently we had a debate here at Kachwanya.com whether the county governments should support local SMEs or they should opt for the multinationals. This debate was inspired by the report on The Standard that tech SMEs are complaining over the issued Expression of Interests by the counties on IT Systems required to manage revenue collection. The EOIs seem to favor the multinationals in that the conditions required cannot be met by local tech SMEs. True to the complain, Mombasa county has approached IBM to help in setting up a fool proof revenue collection system in the county.
According to the report appearing on Business Daily, Mombasa county Governor Mr. Hassan Joho held talks with IBM officials at the last week’s conference in Morocco where they reached an agreement that IBM will fund and set up the revenue collection system targeting to collect taxes from businesses and collection of land rates.
“This will no doubt create a transparent data base because it will be possible to track payments real- time, improve efficiency, reduce cash transactions as well as ensure there are no leakages in these payments,” said the governor’s economic adviser Hamisi Mwaguya.
This type of system that is already set up in cities like Kampala, Accra and Rabat and Casablanca and is expected to double the shs. 6 million collected daily in Mombasa county is a plus. The approach is that IBM will fund the project and get back the investment plus some margin by sharing on the revenue to be collected over a specified period of time.
This approach is beneficial to the county government in that the government does not have to borrow loans to invest in projects that it cannot currently fund. If Mombasa was to receive a loan or allocate funds for such a project we know that a large portion of that money would have ended up in private pockets.
Given our previous debate on this subject and the approach Joho has taken, should we criticize the county of Mombasa for overlooking local tech firms? Your thoughts.