KRA nets Sh10bn rental income tax from 52,000 landlords

The rental income tax was introduced by the Finance Act 2015
The rental income tax was introduced by the Finance Act 2015. PHOTO/FILE
The Kenya Revenue Authority (KRA) has collected Sh10 billion from 52,000 landlords since 2016, as its hunt for a share of property-owners’ income continues to bear some fruit.

The KRA, which has recently mounted a harsh crackdown on non-compliant landlords, said Tuesday that it had enlisted 52,000 landlords so far and it was targeting to list 20,000 new landlords in the financial year 2016/2017.

“We have recruited 52,000 new landlords against our target of 100,000 and are collecting Sh400 million on average each month, or Sh4.8 billion a year,” KRA real estate manager Alice Kiptoo said on Tuesday.

Ms Kiptoo told a media sensitisation workshop on Rental Income and Capital Gains Tax in Nairobi that KRA had partnered with the Kenya Bureau of Statistics, Kenya Property Developers Association and the Ministry of Lands, Housing and Urban Development to smoke out nonpayers.

KRA has warned defaulters, who owe the taxman Sh50 billion in back taxes, penalties and interest payments, to prepare for tough consequences.

Deputy Commissioner for Domestic Taxes James Ojee said that KRA will descend hard on property-owners who have failed to utilise the June 1, 2015 to June 30, 2016 amnesty, and it will audit back taxes payable, which would raise the dues considerably.

“If you go to our database, the debt portfolio is Sh50 billion but that includes principal, interest and penalties accumulated over time,” Mr Ojee said.

The rental income tax, which is charged at a flat rate of 10 per cent of the monthly rent received from tenants, was introduced by the Finance Act 2015, and it targets landlords receiving less than Sh10 million a year.

Individuals who fail to remit tax on rental income by the 20th day of the succeeding month are automatically slapped with a charge of 20 per cent on the defaulted tax as well as a Sh20,000 penalty every month.

KRA has enlisted 800 agents countrywide to withhold 10 per cent of landlord’s rent as a device of catching more taxpayers.