•Any unpaid land rates would attract a simple interest charged at the rate not exceeding the prevailing Central Bank rate.
•The proposed law seeks to provide that payment of rates shall be based on the annual rental value of an area.
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County governments could soon be handed powers to collect rent from tenants and occupiers of land whose owners default in payment of rates.
A bill by National Treasury seeks to provide a uniform law to be used by the regional administrations for a better collection of land rates.
The National Rating Bill, 2021, seeks to repeal the Rating Act and the Valuation for Rating Act to provide that the chief government valuer would collate the valuation rolls drawn by counties.
In the face of pressure to recover unpaid land rates, the law is being enhanced to provide that counties may appoint a receiver to recover the rent from tenants and occupiers.
If the bill is approved, county governments would also apply as a beneficiary in case of succession where the property is yet to be transferred to beneficiaries.
Governors would also have powers to auction such properties at the prevailing market value in accordance with provided procedures to recover the rate due.
“The rating authority (county government) may cause a written demand to be made upon such person to pay within 14 days and consequences for failure to pay within the specified timelines,” the bill reads.
“If any person who has had such demand served upon them defaults, the rating authority may levy a penalty at the prevailing market rate, deny certain county services, institute a suit against the defaulter, or apply any methods to recover the rates,” the bill reads.
Any unpaid land rates would attract a simple interest charged at the rate not exceeding the prevailing Central Bank rate.
Counties would also be at liberty to determine the rate at which it would charge interest on defaulted rates as long as the same is published in a notice in the Gazette.
Several county governments have decried low collections in land rates with Nairobi collecting as low as Sh2.8 billion against a possible Sh6 billion.
Administrators argue that whereas land prices have skyrocketed, rates remain low hence defeating efforts to shore up own-source revenue.
Kenya Revenue Authority earlier attributed the low collections to landlords’ non-compliance with county rates, permits and licensing obligations.
Land used for public religious worship, cemeteries, crematoria and burial or burning grounds for the dead, public institutions, hospitals, schools, public benefit organizations, museums, libraries and public outdoor sports will not be rated.
This would be as long as the land parcels or any part of it are not used for profit or residential purposes.
“For places of public religious worship with profit earning ventures, only the place of worship will remain exempt from taxation,” the new law reads.
Land rates would also not apply for property leased for purposes of foreign embassies and missions when the same is still registered under the rateable owner.
Public educational institutions and organizations termed as public benefit organizations but do not fall within the definition of the proposed National Rating Act, 2021 would equally be exempt.
In what would change the times for landowners, payment of rates shall be based on the annual rental value of an area.
“The valuer when determining the rate in respect of area rating shall consider the annual rental value rate,” the bill reads.
County governments would be required to take into account the different categories of properties for purposes of payment of rates.
This means there would be rates applicable to residential, commercial, agricultural and public properties or any identified by country-specific laws.
The Cabinet Secretary with the National Land Commission will also provide guidelines on royalties paid on forestry land and its products for rating purposes.
The bill proposes a National Rating Tribunal which shall be an ad hoc tribunal but from time to time be called upon by the Judicial Service Commission to determine objections that may arise.
Its work would be to hear and determine objections to land rates charged by county governments and review decisions of the devolved units in matters of remission and recovery of rates.
Disobeying tribunal orders would cost the culpable Sh10,000 or imprisonment for a term not exceeding six months or both fine and jail time.
“Appeals from the tribunal shall be to the chief magistrate’s court at first instance on both matters of fact and law,” the bill reads in part.
A person aggrieved with the decision made at the chief magistrates’ court may appeal to the Environment and Land Court Act, 2011.
Edited by Kiilu Damaris