Homa Bay Governor Gladys Wanga has ordered a 15-day tax waiver for traders as her administration tries to identify gaps that lead to revenue losses.
Over the period, revenue collection officers stationed at markets and other points will report to the department of finance and economic planning for further directions.
The suspension starts on Wednesday as a 13-member multi-agency task force works on ways of generating more funds.
She said she had learnt of suspicious activities among revenue officers that had prevented the county from reaching its financial goals.
The county government had projected to collect Sh300 million this year when it can raise Sh1 billion, she said.
She said she was disturbed by the county’s dismal performance in generating its own revenue
"In the period immediately after my inauguration, I sought an update from relevant offices on the financial health of the county and the state of revenue collection, especially in our markets and public transport system," the governor told journalists on Monday.
She added: “We have seen a fluctuation that points to a breach in the system of revenue collection. There is no point in people paying money that does not reach the county.”
During her campaigns, the governor pledged to streamline revenue collection during her first 100 days in office.
She said the initial report she received showed that the devolved unit had an unusual pattern of revenue collection, remittances and management in July and August, when a review was conducted.
It is suspected that unscrupulous revenue collection officers have perfected the art of deceit, pocketing funds meant to run the county government.
The review established that the county's revenues dropped significantly in the two months.
"The sad scenario of a significant drop in revenue collection could manifestly be unlawful and in contravention of public policy and must be confronted by putting in place a system that ensures there is no recurrence of such an act in the county, as well as bringing the culprits to book with the full force of the law," Ms Wanga said.
To avert possible loss of funds, traders will not remit taxes until September 29 as officials investigate the matter.
Some of the fees suspended are charges on market users, offloading, and transportation of building materials from quarries.
"To give effect to the waiver, I have directed the county executive member for finance to publish the necessary notice in accordance with Article 210 of the Constitution, Section 159 of the Public Finance Management Act and Section 14 of the Finance Act," she said.
In the meantime, a task force has been established made up of financial experts, including former Kenya Revenue Authority officers, ICT experts and a former National Intelligence Service officer.
They will investigate and undertake a forensic audit of the county revenue collection and management system within 21 days, map revenue sources and seal loopholes leading to loss of funds.
"The multi-agency task force will submit its initial report to my office in accordance with its terms of reference," the governor said.
"I will remain true to my campaign promises and will continue to lead a clean and open government, committed to the rule of law and timely provision of much needed services to citizens to ensure they all benefit from the hard-earned fruits of devolution," Ms Wanga said.