Taxing land owners could hinder devolved county investments

By F T ODHIAMBO

The devolved county system of government is meant to bring services closer to citizens so that they can participate fully in governance and development issues affecting them.

County governments must have reliable sources of revenue to enable them govern and deliver services effectively. Apart from funds from the national treasury, which is shared among counties, each county government has to device strategies for raising funds to supplement the national government allocation to meet their economic and development needs.

Raising extra funds by county governments should not be a problem with proper planning. Former local authorities were able to raise revenues through licences, land rates, cess and other lawful fees, which unfortunately were embezzled by dishonest council officials.

But the county governments should be cautious on the methods to raise additional revenues as some overzealous governors might use unlawful methods such as taxing land owners, as recently stated by one of the county governors. This might hurt the same people the county government was supposed to protect, resulting in scaring away potential investors and failure to realise the potential of the counties.

Land holding

Land is the basic factor of production and its availability will spur the county’s economic growth and development by attracting investors in sectors like agriculture, industrial, tourism, settlement, and other natural resources like forestry and exploitation of water and minerals.

Land, whether public, communal or private should be used and managed equitably, efficiently, productively and sustainably. It should be a booster to revenue generation from activities carried on it. The counties should give incentives to land holders rather than thinking of taxation.

Small land holders contribute to the economy by doing small-scale intensive farming while large-scale land holders do extensive agriculture and other related economic activity, thus creating employment to the locals, paying land rates, and cess from farm produce. The farming activities contributed to success of some former local authorities.

The national government and county government are inter-dependent and conduct their business through consultation and cooperation. Parliament enacts legislation to ensure that investment in property benefit the local community. Land holders also enjoy protection of rights to property.

Immovable property

Under the law, it is the National Land Commission charged with assessing tax on land and premium on immovable property. As such, only the national government can impose tax while county governments may impose rates and other lawful fees such as licences and approvals.

National legislation is also there to prevent unreasonable action by a county that is pre-judicial to the economic health or security of Kenya or another county or impend the implementation of economic policies. This is necessary for maintenance of economic unity.