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Pay your land rates or face auctioneers

Nairobians who fail to settle their outstanding land rates risk having their properties auctioned by the County government.

City Hall officials yesterday urged businesses and individuals who owe the  county Sh38 billion to take advantage of the on-going penalty waiver period.

“We are asking them to respond because beginning next year legal action will be taken. This could mean the auction of properties of those who don’t pay,” said accounting officer in charge of Rates, Stephen Muriithi.

Going forward

So far, Mr Muriithi said the amnesty which has been running since October 15 has netted Sh100 million against a targeted Sh3 billion. There are only seven days to go.

According to the official, the County government will rely on the Rating Act which it invoked in the previous rates recovery campaign dubbed “Operation Clampdown.”

Those whose properties are attached to banks may also find it hard going forward as  City Hall also plans to pursue the amounts owed to it through the financial institutions.

Currently, land rates are based on the 1982 valuation roll but this is set to change beginning January next year as provisions of the Nairobi County Finance Act, 2013  become effective.

The rates are expected to double from the current 17 per cent to 34 per cent.

However, rate defaults by government institutions are being handled at the national level with Treasury acting as the facilitator.

“We’ve had discussions with the Treasury and they are looking at our proposal,” said Finance and Economic Planning Executive Gregory Mwakanongo.

This could see the national Treasury settle the amounts on behalf of the institutions, but  such an agreement is yet to be reached.

Land rate defaults have been cited as one of the reasons for poor revenue collection which has continued to trail expenditure.

Bargaining

According to Mwakanongo, October revenues improved to Sh516 million following the coming into effect of some provisions of the Finance Act at the beginning of the month.

This is however still short of the Sh800 million wage bill that the county is shouldering after it started honouring a workers’ comprehensive bargaining agreement (CBA) at the end of September.

“We have some transfers from the national government which are helping bridge the deficit, but that is not sustainable,” added Mr Mwakanongo

Previous attempts at recovery of land rates collection have not yielded expected results.

Operation Clamp Down that involves the county government taking over rent collection for buildings until the rates are cleared has so far been the most effective.

However, Mr Mwakanongo said that was only effective for those who owe large amounts and cannot be used to recover all rates.

The exercise, which was started in 2012, has been targeting buildings mostly in the city centre. Most have responded by promptly paying the rates.

In July Chester House, Marshall House and Mwea Rice House, all on Koinange Street were the latest casualties but the three were later ‘unclamped’.