Property owners in low-income areas could soon be required to pay a standard land rate charge to their respective county government after MPs in the National Assembly proposed a Bill introducing a new land tax across the country.
The National Rating Bill, 2023, sponsored by the leader of the majority party in the National Assembly Kimani Ichung’wah, seeks to impose mandatory payment of land rates by all property owners in low-income areas.
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The Bill, which has since been tabled before Parliament for debate, aims to establish a comprehensive legal framework for levying properties and land throughout the country.
In addition, the proposed law also introduces a mechanism to accurately measure ratable properties and aims to broaden the tax base.
In his contribution to the Bill during a debate on the floor of the House, Ichung’wah argued that the reason and object of the Bill is to provide for enhancement, certainty, uniformity and fairness in the taxes and property rates levied by county governments.
This, he said, will guarantee secure own-source revenue for devolved units that have struggled in generating enough funds independently.
“This Bill aims to eliminate disparities between counties in terms of the rates and taxes imposed, which can have adverse effects on businesses and individuals. Uniformity in taxation will promote a more balanced and conducive business environment across the country,” said Ichung’wah who is also the Kikuyu MP.
According to a study conducted by the National Treasury in collaboration with the World Bank in 2018, the revenue potential of county governments ranged between Sh55 billion and Sh173 billion, a stark contrast to the Sh35 billion currently being collected.
During debate, North Mugirango MP Joash Nyamoko who chairs the Departmental Committee on Lands said it is evident that the revenue collected from properties and land rates is not as attractive as the revenue generated from parking fees and health facilities.
Nyamoko emphasized the significance of revisiting this space since county governments cannot achieve their full potential due to their reliance on laws passed in the 1960s for the collection of rates.
“This Bill seeks to provide a uniform legislative framework for both the national government and county governments, governing the imposition of rates and property valuations as per the Constitution’s contemplation,” Nyamoko said.
Furthermore, the Bill strives to enhance certainty, uniformity, and fairness in levying property rates across county governments.
Currently, various county governments have established their rating laws, often differing from one another.
By having a single legislation governing all county governments and the national government, there will be harmony and consistency in the rate collection.