Property owners face new taxes as counties eye more revenue in line with a policy unveiled by the Treasury.
The policy to support enhanced devolved revenue calls for new valuation rolls for land and was prepared by counties with oversight of the National Land Commission (NLC) in consultation with the Ministry of Lands.
It also wants county governments to ensure that all titled land is ratable in any form appropriate for local economic status.
“In each county, all land parcels should be declared as ratable, with an appropriate form of rating being applied to each parcel,” it says.
The policy also calls for an update to the agricultural rental value form of rating in response to evolving use of rural land, for example for tourism and conservancy.
“Trading and market centres need to be planned, surveyed and registered as a matter of urgency so as to have them rated,” it says.
Treasury secretary Henry Rotich had earlier this year said the government plans to rope in the taxman to help county administrations seal loopholes in tax collection for land and property.
“The current property tax is not well designed; valuation rolls are outdated and the coverage is low. We have identified so many challenges,” said Mr Rotich in Nairobi February.
“What we are going to do is deal with the legal design first, then (see) how we can capacitate counties. Perhaps one option is having the KRA (Kenya Revenue Authority) working with them to collect for them. It is not going to necessarily increase the rates. It is all those aspects we want to look at.”
Last April, Lands secretary Farida Karoney told the Senate Committee on Land, Environment and Natural Resources that the government had finalised taxation guidelines on idle land in efforts to boost agricultural production and enhance food security.
Implementation of the Idle Land Taxation Policy, if adopted by the National Assembly and Senate, would see owners of idle land face penalties.
On the flipside, it is likely to push land owners to coming up with ways of putting the parcels to productive use, also improving tax collection.
“We have the Land Taxation Policy that seeks to provide a package of incentives to encourage productive and sustainable use and disincentives for keeping idle land,” Ms Karoney said.
The KRA last October said it would mine data from the National Construction Authority records in its ongoing crackdown on tax cheats.
The tax agency, which is facing the tough task of raising enough revenues to finance the Sh2.97 trillion budget, said it hoped that information from these sources would boost its quest to unearth undisclosed income sources and boost revenue collection.