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Nairobi landowners owe City Hall Sh96bn in rates

Landowners in Nairobi owe City Hall Sh96 billion in land rates, a report by Auditor-General Edward Ouko shows.

The audit report for the year ended June 2014 shows that the amount rose from Sh64 billion a year earlier (a 49 per cent increase).

The amount comprises of the accumulated land rates and penalties which are levied at three per cent of the outstanding amount every month.

“It is clearly evident that the county management has failed to collect rates,” said Dr Ouko in his report for Nairobi.

“Additionally, the increase of Sh31,899,368,605 within the year has not been supported or explained and no efforts appear to have been put in place to collect the outstanding accounts.”

The growth in the amounts owed shows an unwillingness by property owners in the capital city to pay rates or take advantage of amnesties granted by the county.

City Hall has been pursuing high profile defaulters, especially those who own commercial properties in “Operation Clampdown” but this is yet to be extended to residential houses.

When a property is clamped the county demands that rent be paid to City Hall until the amount owed is cleared.

Although the county is legally allowed to auction properties of defaulters, it has never taken this option.

Mr Ouko said he could not verify that the Sh96 billion is the actual amount that the county is demanding from property owners saying that the figure was not supported by documents.

Besides the poor records for land rates owed, the audit report paints a picture of poor book keeping with revenues and expenditure in multiple instances unaccounted for.

City Hall continues to hold the accumulated land rates amounts in its books but has been unable to recover the amounts.