Government mulls new taxes for Kenyans with idle land
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Ruto government planning a new tax dubbed 'Idle Land Tax' against individuals and organisations that own idle land in the country
Ruto government planning a new tax dubbed ‘Idle Land Tax’ against individuals and organisations that own idle land in the country.
According to People Daily Digital , the government push for the new tax could be implemented before December 2024, as the government seeks more revenue streams to meet the government’s financial obligations.
“Officials in the Ministry of Lands and the Kenya Revenue Authority (KRA) have been given a minimum of two weeks to come up with viable ways of implementing the policy,” our source intimated.
The tax is a revival of a suggestion floated 11 years ago during President Uhuru Kenyatta’s regime but has never been implemented.
Initially, while suggesting the introduction of the taxes, former Lands PS Dorothy Angote proposed that the National Land Commission (NLC) would be commissioned to set the amount 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.
Kenyans and organisations will now be needed to show proof of economic activities on parcels of land they own, failure to which they will forfeit the land to the state.
The push according to sources has been necessitated by recent missed tax targets by the taxman, which has not settled well with the executive.
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According to data from the National Treasury, KRA collected a total of Ksh1.27 trillion in the first half of the financial year 2023/24 ended December 2023.
The collection was below target by Ksh182.4 billion mainly on account of a shortfall in ordinary revenues of Ksh186.2 billion.
To plug the deficit, the government has been focused on setting up new taxes and even increasing the existing ones.
For instance, the government doubled the Value-Added Tax (VAT) last year from 8 per cent to 16 per cent, introduced the Housing Levy and taxation of travellers at entry points for personal or household goods above USD500 (approximately Ksh66,000), whether new or used.
If the new policy succeeds, all Kenyans holding idle pieces of land will be required to lease them for agricultural purposes and pay taxes for the proceeds they get.
The new move is expected to affect several landowners in Kenya who hold big tracts of land idly.
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