Evaluation of Property Rates Collection and Enforcement in Devolved Systems of Governance in Kenya

A Case Study of Nairobi City County

Abstract

The paper evaluates property rates collection and enforcement in devolved systems of governance in Kenya with a specific focus on Nairobi City County. The study sought to establish the property rates Collection Ratio (CR) in Nairobi City County (NCC); identify and measure the effectiveness of property rates’ collection and enforcement tools in NCC; and determine challenges faced by NCC in rates collection and enforcement. The study focused on property rates collection and enforcement in 20 zones within Nairobi City County. Rateable properties were sampled using stratified random sampling. The respondents included rateable property owners, chief accountant in charge of rates and land rates collection and enforcement officers (debt collection unit). The study involved the use of a semi-structured questionnaire for collection of primary data. Data analysis was done using SPSS and MS Excel. The study established that collection ratio has been reducing over the years; from 16.93 percent in 2011/2012 to 6.65 percent in 2014/2015. The property rates collection and enforcement tools utilized in Nairobi City County include provision of discounts and waivers on property rates interest; sanctions and penalties; and social pressure. The enforcement tools that were found to be effective in ensuring compliance in rates payment include provision of improved public services; operational debt recovery; sanctions and penalties; provision of discounts and waivers on interests & penalties. Some of the challenges hindering compliance in property rates payment in Nairobi City County include negative attitude of the public towards property rates and rates officials; unfair administration; discontentment with property rates administration; and complexities in understanding tax system and payment procedures. To improve on compliance, the study recommends provision of improved public services to boost the morale of rates’ payers; use of an integrated computer assisted property rates administration system; and capacity building of the administrators.