The Treasury has failed to implement a Parliamentary directive to authorise the National Land Commission (NLC) to collect government revenue from the land sector.
National Treasury Cabinet Secretary John Mbadi missed the June 30 deadline set by the lawmakers following a request by the commission to the Budget and Appropriations Committee.
The National Assembly in March 2024 approved the Chief Executive Officer of the NLC as the collector of revenue for the National Government in line with the provisions of Section 76(1) of the Public Finance Management Act, 2012, to enhance collection of Appropriation-in-Aid.
This means that the NLC would handle some revenue streams already administered by different government agencies, including the Kenya Revenue Authority (KRA), which collects rental income tax, capital gains tax, and withholding tax on rent.
The stamp duty collection was transferred from KRA to the Ministry of Lands via the Ardhisasa platform or e-Citizen in November 2023.
The latest update by the National Treasury confirmed that the NLC is yet to be granted a revenue collector role amid claims that the commission had not requested approval to play the role nor specified the income streams it planned to handle.
‘The National Treasury has not received any request from the National Land Commission requesting approval to be the collector of revenue, and clearly specifying which revenues they plan to collect,’ Treasury said in its 2027 budget plan, currently getting inputs from the public.
The Treasury added that it will engage the Commission on enhancing Appropriation-in-Aid, the term for revenue collected by government agencies and remitted in accordance with approved arrangements in the budget.
Insiders at the NLC, however, denied the claims by the Treasury, saying the commission is ready to discharge its mandate.
‘The Treasury should be truthful about this matter because we have appeared before Parliament and expressed our concerns about the delays in granting us the tax collector role,’ an insider at the Commission told the Business Daily on Tuesday.
This raises accountability questions on progress in implementing Parliament’s policy directives under Section 25(8) of the Public Finance Management (PFM) Act, where lawmakers draw such powers.
The Parliamentary resolution, first made in March 2024 was to be considered in the 2025 Budget Policy Statement (BPS). The initial deadline was missed and was repeated in the 2026 BPS, directing the Treasury Cabinet secretary to authorise the NLC to collect national government revenue under Section 76(1) of the PFM law.
The latest resolution required the Treasury to fully implement the directive by June 30, 2026, but the new disclosure points to a process that remains unresolved more than two years after lawmakers backed the proposal from the NLC.
KRA currently administers rental income tax on residential properties, capital gains tax on profits from property disposals and withholding tax on rent paid to certain landlords. Under the withholding system, qualifying tenants are required to deduct the applicable tax from rent and remit it directly to the tax authority.
Stamp duty collection, however, was transferred from KRA to the Ministry of Lands in late November 2023, with payments processed through platforms including Ardhisasa and e-Citizen to streamline land transactions and title registration.
The proposed NLC role is not clear on how the commission would work with KRA and the Ministry of Lands, and whether its responsibilities would cover particular fees and levies or extend to specified tax collection functions.
The push comes against a backdrop of untapped revenue potential in the property market, particularly rental income, where the KRA has struggled to bring more landlords into the tax net.
During the launch of the Electronic Rental Tax Information System (eRITS) in April 2025, Treasury Principal Secretary Chris Kiptoo said the government collected about Sh17 billion annually in rental income tax against an estimated potential of more than Sh100 billion.
KRA first introduced Monthly Rental Income (MRI) tax in 2016 at a rate of 10 percent before cutting it to 7.5 percent in January 2024 to encourage voluntary compliance among residential landlords.
Despite the rate reduction, rental-tax collections have grown slowly.
The KRA has classified landlords among hard-to-tax groups, alongside small traders operating in informal settings, reflecting difficulties in identifying property owners, tracking income and enforcing compliance.
The NLC is mandated to manage public land, recommend national land policy, oversee compulsory land acquisition and investigate historical land injustices. The commission also monitors land registration and land-use planning across the country.
The parliamentary resolution did not establish that the NLC would take over all land-related taxes from KRA or assume the Ministry of Lands’ stamp duty responsibilities. The precise revenue streams and division of responsibilities have not been publicly made clear.