34. Rating Act, 1963 (Cap 267)

The Act provides for imposition of rates on land and buildings in Kenya.

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· Section 3 imposes on local authorities (county council, municipal council or town council) the duty to levy rates. The nomenclature speaks to the institutional structure that has since been changed by the obtaining legal regime, indicating the need to update the Act.

· Section 4 provides for the forms of rating that the authority may adopt to include: area rate; agricultural rental value rate; a site value rate or a site value rate in combination with an improvement rate. No two methods of rating shall be applied in the same area. Further, the Minister must approve the form of rating adopted in an area before the same is imposed.

· Section 5 provides for alternative methods of area rating that may be adopted by an authority.

· Section 8 empowers the authority to levy a supplemental rate for any financial year if it thinks necessary to meet the requirements of the authority so long as in cases of site value rate or improvement rate no such rates shall exceed 4% per annum of value of land without the consent of the Minister. This provision, however, affords an opportunity to a county government/local authority to increase rates.

· Section 9 stipulates that a rating authority may levy a special rate in any part of the locality which is liable to be separately rated in respect of any expenses to be incurred in the financial year and which the Minister has declared to be special expenses.

· Section 12 requires the rating authority to adopt methods of rating which ensure equitable distribution of rates over all parts of the respective area of the local authority.

· Section 13 also provides that the rating authority in areas of urban, area and local councils may levy a rate to meet the expenses of the council.

· Section 15 provides that upon a rating authority giving a notice for payment of rate (which are due on the first day of January in each financial year), it shall be the duty of every person liable to pay such rate to pay the amount of such rate at the offices of the rating authority or at any place whether within or without the area of the rating authority to any person authorized by the rating authority to collect such rate on or before such day, failing which proceedings may be taken against them.

· Section 15(2) allows the rating to offer a discount of no more than 5% on the rate payable or such other discount as the rating authority may with the approval of the Minister decide, on any person who pays applicable rate on or before the due date. This provision is meant to enhance compliance in paying of rates.

· Section 15(3) states that the rating authority shall charge simple interest at the rate of three per centum per mensem or at such other rate as the Minister shall by notice in the Gazette prescribe on any sum remaining unpaid after the day on which the same was payable and for the purposes of this subsection a part of a month shall be counted as one month, but in no way shall the interest exceed the principal amount owed (in duplum rule).

· Section 17 also provides for the enforcement mechanism for any unpaid rates which have become due including court action. The provision, however, refers to subordinates of the first class and the Supreme Court (the earlier ones which were abolished) and therefore needs updating.

· Under section 18, a rating authority can recover the applicable rates that remain unpaid from a tenant or occupier of the property in issue by requiring such tenant or occupier to pay the applicable rent directly to the rating authority to offset the unpaid rates.

· Section 19 provides that the rate chargeable on property shall be a charge on the land against which the rate is levied and may be registered as a charge against the title of the land by the registrar upon notification, and such charge shall take precedence in law. This means that unpaid rates can encumber land/property and make it impossible for any transactions to be effected on the property.

· Section 20(2) reads that where the rateable owner is absent from Kenya any person receiving the rent or being in charge or control of such land shall be liable for such rate.

· Section 22(2) provides that a rating authority may reduce or remit the payment of any rate levied on land with the approval of the Minister.

· With respect to government/public land and community land, section 23 provides that the rating authority shall charge an annual contribution in lieu of rates as set out in law.

· Section 25 refers to the subordinate court of the first class as the one with jurisdiction to hear disputes to recover rates. This cadre of courts, however, is no longer in place. This speaks to the need to revise the Act.