City Hall risks losing millions of shillings in land rates should the taxman continue demanding land ownership documents for payment of rates.
Deputy Majority Leader Peter Wanyoike asked City Hall and the Nairobi Metropolitan Services (NMS) to ensure rates are collected from all land owners.
In the financial year ended June 30, 2021, City Hall earned Sh9.94 billion annual own source revenue with land rates leading with Sh2.76 billion.
City Hall risks losing millions of shillings in land rates should the taxman continue demanding land ownership documents for payment of rates.
Nairobi members of county assembly (MCAs) say there are many landowners who are unable to pay rates because they do not have the documents the taxman requires.
Majority Whip Paul Kados says the Kenya Revenue Authority (KRA) — the principal revenue collector for Nairobi County — has been demanding ownership and identity documents and KRA Pin certificates from property owners before paying rates.
This, he said, has seen landowners with provisional ownership documents willing to pay rates but have been locked out.
“The demand for these documents has seen many land holders unable to provide the documents required by KRA hence are barred from paying rates, even though these parties remain willing to pay rates,” said Mr Kados.
“The county government is losing revenue running into hundreds of millions of shillings due to the aforesaid failure to pay rates owing to the demands by KRA,” he added.
The Mihang’o Ward MCA pointed out that the problem is occasioned by many parcels of land within Nairobi lacking titles or other final ownership documents only having letters of allotment, certificates of ownership, share certificates, and other provisional documents.
This has resulted in many pieces of land having ownership disputes, some pending in the courts and other dispute resolution tribunals and institutions which take years to resolve.
“Many of such parcels of land have already been developed with the owners of such land willing to pay land rates and indeed the law requires rates to be paid by whoever is claiming ownership of any such property,” he said.
Own-source revenue
Deputy Majority Leader Peter Wanyoike asked City Hall and the Nairobi Metropolitan Services (NMS) to ensure rates are collected from all land owners, including where only provisional ownership documents are available or where there are ownership disputes pending in court or other institutions.
This, he said, will ensure land rates are paid since it is one of the top sources of revenue for City Hall accounting for almost 25 percent of Nairobi County government’s own-source revenue.
In the financial year ended June 30, 2021, City Hall earned Sh9.94 billion annual own source revenue with land rates leading with Sh2.76 billion.
However, this was only 55 percent of the annual target of Sh5 billion.
Tax obligation
“It will be good if the county comes up with mechanisms to ensure that all landowners are included while collecting revenue,” said the Dandora Area I MCA.
“Many landowners are willing to pay rates, however, their lands have disputes and are in court and may take time to resolve. Therefore, they should be allowed to exercise their rights as citizens of this country and their obligation in paying taxes.”
