Accountants have backed the proposal to penalise owners of idle land as contained in new taxation guidelines that await Parliamentary approval, saying it will tame hoarding of the scarce resource.
The National Treasury signalled tougher tax rules on property owners with introduction of the idle land tax in a bid to collect more revenue and boost agricultural productivity. The Institute of Certified Public Accountants of Kenya (ICPAK) told Parliament allowing strategic land acquisition (Public Land) and prohibiting land speculation will boost economic prosperity of the country.
“It is expected the introduction of this idle land tax will discourage land hoarding and balance off the high cost of land,” Fredrick Riaga, ICPAK chief manager, public policy and research in his presentation to the Senate Finance Committee.
The Idle Land Taxation Policy is currently awaiting adoption by Parliament and is part of efforts to boost agricultural production and food security in the country.
ICPAK joins the World Bank among institutions that support introduction of the taxation guidelines on land.
The multilateral lender said in a report released in April that property taxes would encourage the utilisation of large tracts of fertile land currently lying idle across the country.
“This (property tax) has become pertinent given large tracts of idle arable land owned by absentee landlords that go unused, pushing many smaller farmers to move into marginal lands,” it said in its 17th edition of its Kenya Economic Update.
ICPAK like the World Bank, projects that entities with large tracts will either be forced to till or lease it out “thereby increasing access to land among smallholder farmers in support of the food security agenda.”