The government has withdrawn a radical Bill that would have seen owners of freehold land within or close to urban areas pay an annual land levy in addition to land rates.
National Assembly Majority Leader Kimani Ichung'wah has written to speaker Moses Wetang'ula asking for the Land Laws(Amendment) Bill, 2023.
In a letter dated June 13, Ichung'wah informs the speaker that the withdrawal is informed by constitutional and legal issues that arose from the Bill.
Ichung'wah said that the executive had advised on the need for the ensuing issues to be addressed and resolved before further consideration.
"'Having consulted with the relevant stakeholders, this is to confirm that the majority party has withdrawn the bill,'' reads Ichung'wah's letter in part.
"I request that the House business committee be notified of the withdrawal of the bill and that no further consideration of the bill should be undertaken.''
The proposed law sparked protests and was criticised by even the National Land Commission (NLC) as amounting to double taxation.
Among those who were to feel the pain of additional levies were homeowners on ancestral land on the fringes of the city like Dagoretti in Nairobi and towns in Kiambu.
While the Bill was already being processed by the National Assmbly, its withdrawal has coincided with the government's backtracking on the Finance Bill after countrywide protests.
The Bill had been criticised as being part of the government's alleged insatiable appetite to raid the pockets of already overtaxed Kenyans for additional revenue to finance its budget.
The Bill sought to amend the Land Act, of 2012 by inserting the new levy after section 54 that would force freehold land owners, property owners who enjoy free ownership for perpetuity and can use the land for any purposes, to pay land rent.
"The owner of any freehold land situated within the boundaries of any urban area or city shall pay an annual land levy equivalent to rant rent charged on a comparable leasehold land or property of the same size in the same zone, provided that any owner of freehold land that is put to agriculture use may be exempted from the annual land levy,'' reads part of the withdrawn Bill.
The Committee on Lands had recently gone slow on the Bill after it realised there was so much confusion in the country's land tenure system, including fears that some land could have been controversially converted from leasehold to freehold tenures.
''Land is very emotive. We realised after public participation that we needed to first clean up the land tenure system before processing the Bill because of its far-reaching recommendations,'' said committee chairperson Joash Nyamoko.
Last December, MPs voted to shorten the Bill's publication period from 14 days to one day to allow its prompt introduction in the house.
The bill was scheduled for debate in the National Assembly on June 18 but was shelved to allow consideration of the Finance Bill which has also been withdrawn but awaiting formalisation by the house.
Experts had warned that if enacted, the amendments to the Bill could see hundreds of Kenyans lose their property to the government.
The National Land Commission had told the lands committee that the introduction of the levy on freehold land would amount to double taxation.
''There should be no levy charged on freehold land apart from rates,'' said NLC Chief Executive Officer Kabale Tache when she appeared before the MPs in February.
"Freehold interests are superior interest and there is no landlord and therefore no rent can be owed.''
According to Mwenda Makathimo, the Executive Director of the Land Development and Governance Institute (LDGI), this translates to taxing Kenyans for owning land in urban areas.
"This means the government is charging you a tax for owning freehold land which is not government land. That is what this Act will bring. The land you might have inherited from your parents or land that you might have bought is freehold land," he said.
Eva Makori, Acting Regional Coordinator, International Land Coalition (ILC) Africa said imposing this annual levy on land that is freehold property essentially has the effect of converting freehold property into leasehold property.
"That, running the risk of dispossessing many Kenyans who may not afford to pay the levy and this includes Indigenous people whose lands are ancestral," she said.
The Bill had proposed increased costs including increasing physical planning fees to Sh5,000 per hour and other professional advice-based services related to physical planning.