Murithi Reveals Major Land Rates Tax Evasion by Nairobi Property Owners

Kenya Revenue Authority (KRA) Chairman Ndiritu Murithi has expressed alarm over substantial unpaid land rates, asserting that Nairobi City County Government is inadequately collecting property taxes. During a statement on Tuesday, May 26, Murithi indicated that the county might be gathering less than 15 percent of rental income because numerous buildings had transitioned from single-family residences into multi-unit apartment complexes, yet continued being taxed as original individual houses. According to the KRA head, regions such as Kilimani have experienced significant transformation during the past two to three decades, with former single-family homes now converted into multi-story apartment buildings and townhouses with sectional ownership. “Property rates, I doubt Nairobi County is gathering more than 15 percent income in property tax for many reasons, most of which the county can actually resolve,” Murithi stated. “For example, in Kilimani, 20 to 30 years ago, many of these were single-family homes. At minimum, two or three-story townhouse blocks. Nevertheless, the character of buildings has drastically changed, making this area now high-density where each flat has sectional title.” The KRA chief, speaking in an interview with Radio Generation, pointed out that despite the apartments being separately owned and thus qualified for individual property rate charges, “This implies they should be paying property rates per unit, but what you discover now is that in the Nairobi City County records, just the original single dwelling is listed, and the property investors are paying rates only on that initial single dwelling,” he added. He criticized the county for not utilizing data already available, arguing that Nairobi City County Government (NCCG) officials grant building approvals and permits for the developments and therefore possess complete awareness of the modifications occurring. “The county understands this thoroughly because they provide the building approvals and permits. Then why aren’t they utilizing that information to collect the property rates?” he questioned. Murithi’s observations arrive as Governor Johnson Sakaja’s administration faces mounting pressure to enhance own-source revenue (OSR) collection to diminish reliance on allocations from the National Treasury. His comments are anticipated to intensify pressure on the amid increasing concerns about diminished revenue from land rates and property taxes. Nairobi has in recent years observed the swift expansion of high-rise apartments in neighborhoods including Kilimani, Kileleshwa, Lavington and Westlands, with developers substituting old maisonettes and bungalows with dense residential projects aimed at middle and upper-income households.