The Kenya Revenue Authority (KRA) and City Hall are set to directly collect rent from a section of Nairobi tenants thus bypassing landlords whose properties face seizure and auction.
KRA had warned the landlords who defaulted on paying land rates and renewing business permits that they would lose their property once the deadline issued by the authority expired.
The ultimatum lapsed on March 31, granting KRA the authority to dictate which action they would take over the landlords.
Among the measures are City Hall and KRA directly collecting rent from tenants. KRA will further revoke building approvals for landlords who have not submitted their rates.
The landlords further risk arrest and prosecution other than losing their property to the authority.
"You are expected to have paid up all the rate fees for the plot, including any arrears owed to the Nairobi County Government.
"The County Government Finance Act of 2015 mandates the authority [KRA] to repossess any land property the owner defaults rate payment and reallocate it to the deserving," the taxman cautioned.
Revenue collection is one of the functions that was transferred from the Nairobi County Government to the national government. KRA was mandated to handle the function in a transfer deed signed by the Nairobi Governor Mike Sonko.
The Nairobi Metropolitan Services (NMS) is expected to review land rates and launch a new system that would determine how rates are paid.
Earlier in the year, KRA offered landlords reprieve through the Voluntary Tax Disclosure Programme (VTDP) which commenced on January 1 and will run for three years.
It allows individuals to declare the income they had not proclaimed. The disclosures eligible under this programme are for tax periods of up to 5 years prior to 1st July 2020. This is from 1st July 2015 to 30th June 20.
"A person granted relief under VTDP shall not be prosecuted for their previous tax liabilities. However, where the applicant fails to disclose the facts of the tax liability, the Commissioner may withdraw the relief, assess additional tax or commence prosecution," Wanja Wangondu, KRA's Assistant Manager of Taxpayer Services told Kenyans.co.ke.
