Senator wants court to stop 'Sh36bn-a-year' eCitizen convenience fee
Kilifi Senator Stewart Madzayo.
Senate Minority Leader Stewart Madzayo wants the High Court to stop a private company from collecting convenience fees from people paying for services on the eCitizen platform.
In a petition, the Kilifi senator estimates that the company collects Sh36 billion annually.
Madzayo says it is unfair and unconstitutional to burden taxpayers with the convenience fee, which is channelled to a third party – Pesaflow Ltd – whose role and ownership, he told the court, remains unknown.
According to Senator Madzayo, the eCitizen platform handles over two million transactions daily and collects about Sh100 million, which translates to about Sh36 billion annually.
"The same has never been included in the national budget as government revenue collected from the platform as a convenience fee," reads Madzayo's supplementary affidavit. "It is unknown how the said funds, if indeed collected... are appropriated."
The senator had gone to court to challenge the Sh50 convenience fee charged for eCitizen services, arguing that it was an illegal tax imposed on all those seeking government services.
He says the money appears to be going to a private company, as evidenced by the issuance of two separate invoices and two separate receipts.
eCitizen platform
All payments made through the eCitizen platform, according to the lawmaker, are subject to a Sh50 'convenience fee' and two invoices are issued for all payments made through the platform.
The government, however, says the company in question is contracted by the government to provide services that are "necessary" for the operation of the platform.
In his counter-affidavit, Treasury Principal Secretary Chris Kiptoo said the private company does not retain any part of the convenience fee.
“The monies are remitted to the National Treasury after collection. In essence, what Pesaflow Limited offers is a platform channel for revenue collection,” his affidavit reads. “The government has been having deliberations and discussions on the implications of the flat rate convenience fee charged on the eCitizen platform."
Also read: Daily eCitizen collections hit Sh900m
PS Kiptoo goes on to explain that the convenience fee is administered and approved by National Treasury.
However, according to Senator Madzayo, one invoice is issued on the government department's letterhead stating that a convenience fee will be charged and a second invoice is issued on Pesaflow's letterhead stating the fee to be Sh50.
Madzayo said the fee is charged at a flat rate for all transactions, including transactions where the service fee paid to the government is Sh50, so the user pays the convenience fee at the rate of 100 per cent of the service fee.
Convenience fee per transaction
In an amended affidavit, Madzayo also claims that the government has failed to show why users of the platform are charged the "so-called convenience fee per transaction if at all the money is to be used to meet operational costs as claimed".
The lawmaker says the private company has been charging users to maintain the platform even though it is the government's tool for revenue collection and mobilisation.
"This is illogical and unfair as the government should maintain its own systems using funds from the revenue collected," the affidavit reads.
“It is my belief that the government, rather than charging the users of its own revenue collection and mobilisation tool for making payments through that system, the government ought to pay operational expenses from the revenue collected.”
