State could deny counties income from land rates
Treasury CS Rotich says plans are underway to ensure state buildings in the counties are exempted from rates
The national government and the counties are headed for a major clash over revenue generation after the Treasury yesterday said it will exempt state buildings from land rates.
National Treasury Cabinet Secretary Henry Rotich told the Senate the now-defunct local authorities and government ministries do not have proper records of the debts owed, making it difficult to settle them.
He said the last time most government entities paid rates and rent was in 1999. Rotich told the Senate Public Accounts and Investments Committee discussions are underway to exempt payment of levies to the county governments for government buildings.
“I am not sure whether government agencies should pay land rates. We are discussing with all stakeholders, including the county governments and the Lands ministry, to arrive at a decision whether government entities should pay rates,” he said.
Rotich said there is need to clarify the data to know the ministries which have paid and those with arrears. He said ministries, departments and government agencies should pay for water and electricity to the devolved units, not rates and rent.
The CS defended the Treasury against governors’ criticism, saying the ministry has cleared all the money owed to the county governments.
Governors have accused the national government of withholding billions of shillings in unpaid rent and land rates, starving the counties of income.
The county chiefs who have appeared before the Senate to respond to audit queries blamed huge pending bills on the Treasury.
PIAC chairman Anyang’ Nyong’o expressed concern that the decision could deny the counties a key source of revenue and cripple their operations.
The Kisumu senator identified Nairobi and Mombasa as some of the counties which rely heavily on revenue raised from local sources, such as land rates.
STATE ACCUSED OF NOT PAYING UP
Nairobi Governor Evans Kidero has filed a petition before the Senate to compel the national government to pay Sh60 billion in rates owed to the county. Kidero said the government has failed to clear its debts, most of them unpaid rent and land rates. Rotich told the Senate the process of transferring assets and liabilities from the now-defunct local authorities to the county governments will be completed by March next year. Currently, the responsibility of transferring assets and liabilities, including tax arrears, statutory deductions such as NHIF, NSSF and Paye, from the defunct authorities to the county governments is assigned to the Intergovernmental Technical Relations Committee.
National Treasury Cabinet Secretary Henry Rotich before the Senate Public Accounts and Investments Committee yesterday