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Property Tax Regimes in East Africa

Property Tax Regimes in East Africa

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The report covers three basic issues: property tax legislation and practice, the significance and magnitude of property tax revenue, and the prospects of property taxation in the three East African countries - Kenya, Uganda and Tanzania.
The report covers three basic issues: property tax legislation and practice, the significance and magnitude of property tax revenue, and the prospects of property taxation in the three East African countries - Kenya, Uganda and Tanzania.

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03/26/2014

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Section 17 of the Rating Act, Chapter
267 deals with procedures for enforcing rate
payment by defaulters. When a rateable owner
fails to pay rates due within the stipulated
time period, plus any interest on any such
unpaid rate, the rating authority may make a
written demand notice on the rateable owner
requiring him or her to make rate payment
plus any interest that has accrued thereto
within 14 days after service of the written
demand notice.

Te various instruments spelt out in law for
encouraging and ensuring compliance include
charging interest on arrears, giving discounts
for prompt payment of the rates, fnes, tax
liens, foreclosures, and recovery from tenants.
However, these mechanisms are either not
employed or are not efective in achieving
compliance.

Despite having a variety of options under
the Rating Act, the rating authorities have
taken a largely passive role in enforcement,
relying almost exclusively on rate clearance
certifcates. Tis clearance certifcate option
relies on taxpayer initiative to clear outstanding
debt and is thus only efective when the
property is being transferred or when a local
business license or permit is being requested
from the local authority.

Active enforcement (through fnes, tax
liens and foreclosures) by the government
is virtually non-existent. To date, no local
authority has applied the legal option of tax
caveats to titles or used property foreclosures
as a means to enforce tax payment.

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