Urban Ad Valorem Land Tax: Implementation Experiences in Some Kenyan Towns

Abstract

Value based land taxes in Kenya are levied by various local authorities for local uses. They are however, mandated by national legislations that give both the local authorities themselves and the Central government (Minister for local authorities) various definitive powers over the administration of the tax. However, revenue from this source hardly ever exceeds 30 per cent per annum of the total revenue for each local authority. For instance, between \989/90 and 1994/95 the national average land tax income (for all local authorities) was only \6.9 per cent of the total municipal revenue. This figure rose to 27.2 per cent for the period \995/96 to 1999/2000. All local authorities in Kenya recognize that the local ad valorem land taxes have a great potential for increasing their local revenue yield if the taxes are efficiently administered. This paper argues that improvements to the land tax administration can be realized if proper land management systems arc put into place to identify, plan. survey and register urban land in the name of individual owners to ensure that all taxable land are captured and details appropriately recorded. This broadens the tax base. Well kept land records indicating allocation and use using correct addresses goes along way in enabling the preparation of accurate valuation rolls. Properly constructed valuation rolls increase accuracy in billing and tax collection which must be done by well-trained and motivated staff. The study has used among others. data from four urban areas in Kenya comprising two large towns, Nairobi and Mombasa, and two small towns Olkalau and Mumias each located in a different province to explain the challenges faced by urban local authorities in trying to implement the ad valorem land tax in Kenya.