Kenya Revenue Authority (KRA) Chairman Ndiritu Murithi has raised concerns over massive unpaid land rates, accusing the Nairobi City County Government of under-collection of property tax.

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Speaking on Tuesday, May 26, Murithi said the county was likely collecting less than 15 per cent of rental revenue because many buildings had changed from single residential homes into high-density apartment blocks, yet were still being taxed as old standalone houses.

According to the KRA boss, areas such as Kilimani have undergone major transformation over the last two to three decades, with former single dwellings now converted into multi-storey apartment blocks and townhouses with sectional titles.

“Property rates, I do not think Nairobi County is collecting more than 15 per cent revenue in property tax for many reasons, many of which the county can actually fix,” Murithi said.

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“For instance, in Kilimani, 20 to 30 years ago, a lot of these were single dwellings. At the very least, two or three-level blocks of townhouses. However, the profile of buildings has dramatically changed, so this area is now high-density and each of those flats has sectional title.”

The KRA boss who spoke during an interview on Radio Generation noted that despite the apartments being individually owned and therefore eligible for separate property rate charges, county records still reflected the original single dwelling units.

“This means they ought to be paying property rates as a unit, but what you will find now is that in the Nairobi City County records, it is only the original single dwelling that is showing there, and the owners of the investments are paying the rates only on the original single dwelling,” he added.

He faulted the county for failing to utilise data already in its possession, arguing that Nairobi City County Government (NCCG) officials issue building approvals and permits for the developments and therefore have full knowledge of the changes taking place.

“The county knows this very well because they give the building approvals and permits. Then why are they not using that data to collect the property rates?” he posed.

Murithi's comments come at a time when Governor Johnson Sakaja's administration is under pressure to improve own-source revenue (OSR) collection to reduce dependence on allocations from the National Treasury.

📰 Source: Kenyans.co.ke