The Kenya Kwanza administration’s desire for taxes appears insatiable as they plan to introduce a new tax for Kenyans. The government is considering implementing an ‘Idle Land Tax’ that will apply to individuals and organizations who own idle land in the country.
Kenya Revenue Authority Offices | Photo courtesy
The proposed tax is not new; it was first suggested during President Uhuru Kenyatta’s regime 11 years ago. However, it has never been implemented until now. The government is reportedly pushing to implement this tax before December 2024, as they seek to generate more revenue streams to meet their financial obligations.
A track of an unused idle land in Kenya| Image Courtesy
Former Lands PS Dorothy Angote proposed that the National Land Commission (NLC) would be commissioned to set the amount of taxes when suggesting the introduction of taxes.
“Once the NLC starts operation, they will set the minimum and maximum acres of land one can own. Those who have idle land will be taxed,” Angote said in 2013.
It seems that the push for implementing a new tax is back, and this time it might be here to stay. The Kenyan government is now requiring individuals and organizations to provide evidence of economic activities taking place on their land. Failure to do so could result in the forfeiture of the land to the state.
As per the data provided by the National Treasury, the Ke nya Revenue Authority (KRA) managed to collect a total of Ksh1.27 trillion in the first half of the financial year 2023/24, which ended in December 2023. However, the revenue collection fell short of the target by Ksh182.4 billion, mainly due to a shortfall in ordinary revenues of Ksh186.2 billion.
The central government is concerned about a warning issued by the Parliamentary Budget Office (PBO) regarding the Kenya Revenue Authority’s (KRA) ability to meet its tax collection target for this fiscal year. According to PBO, KRA is likely to fall short of the target by Ksh330 billion due to a trend of missed targets in the first half of the fiscal year, which could continue until the end of the year.
“This trend points to an overall deviation of 13 percent from the target, implying that by the end of June 2024, government revenues are likely to underperform by Ksh330 billion,” PBO warned.
The government has taken a significant step towards addressing the food deficit in the country by increasing agricultural productivity. According to government sources, the move is aimed at boosting the agricultural sector’s productivity. In July of last year, the government made over 500,000 acres of state-owned land available for agricultural investment by the private sector to further increase the agricultural output.
“Recently, we experienced the biggest food deficit the country has ever seen with a shortfall of over 10 million bags of maize. This initiative is fully aligned with the Agricultural Sector Transformation and Growth Strategy (ASTGS 2019-2029), which is a key component of our overall economic development plan,” Kello Harsama, the Principal Secretary (PS) for Crops Development said in July 2023.
If the proposed policy is implemented, all Kenyans who own idle pieces of land will be required to lease them out for agricultural purposes. They will also be expected to pay taxes on the proceeds they receive from leasing out the land. This move is likely to affect many landowners in Kenya who hold large tracts of idle land.
By Isaac Sanya.