City Hall targets land rates defaulters as it eyes Sh30bn in annual revenues

Source: Capital FM Kenya
Author: Laban Wanambisi, Phidel Kizito, Mercy Sowek

NAIROBI, Kenya, May 24 -- Hundreds of property owners risk losing prime land in Nairobi over nonpayment of prescribed rates.

The affected properties, running into thousands, are at the centre of a renewed effort by City Hall to generate at least Sh30 billion annually in revenues mobilized through land rates, up from about Sh7 billion.

City Hall collects rates from about 20 per cent of nearly 250,000 landowners, with a majority either unwilling to pay or unaware of the obligation to remit land rates.

The Nairobi County urged the defaulters to utilize a month-long penalty waiver to clear accrued rates in a publication on Friday.

County Chief Officer for Revenue Administration Wilson Gakuya noted City Hall faced financial constraints despite the revenue potential.

"If land owners were to comply, the county would generate over Sh30 billion annually but because of defaulting, we normally target Sh7 billion from those willing to pay the land rates out of the waiver," Gakuya explained.

He noted City Hall had only realised Sh3 billion out of a target of Sh7 billion in the 2023/2024 financial year.

"This is below target and a big concern to the county and this is why we have taken this action (publishing) to create awareness and tell them to take advantage and meet their dues," he said.

Gakuya noted that the underperformance was impeding service delivery to city residents.

"When we do a projection of Sh7 billion and there is a deficit of Sh4 billion, this means there is a service that will not be delivered," he explained.

City Hall declared a month-long waiver period effective May 20 to encourage compliance.

Gakuya warned that the county will consider enforcement measures at the end of the waiver period on June 20, including clamping.

He noted that the county will consider demanding direct payments from tenants, starving landlords of rental income.

"We can also advise clients or tenants to pay their rent to the county government other than the landlords until the county recovers its dues," said Gakuya.

He noted that some properties were locked up in legal disputes resulting in uncertainty over ownership.

"Some clients are just ignorant of the law and don't know they are supposed to be paying on an annual basis and for others; the county must go for them to comply," Gakuya noted.

Despite the low compliance levels, Gakuya noted City Hall hand achieved a 20 per cent increase in paid land rates.