Agents to help KRA bring in rental tax

Kenya Revenue Authority (KRA) Commissioner General John Njiraini at a media briefing ahead of 2014 Taxpayers' Week that starts Monday 13-17 October, 2014. KRA will station agents in estates countrywide to help collect rental income tax. FILE PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • The move is part of reforms targeting to bring aboard non-compliant businesses in the informal sector.
  • The team is working under the Kenya National Spatial Data Infrastructure project to map out land parcels and properties. Information collected will show houses, names of landlords and PIN numbers.

The Kenya Revenue Authority will station agents in estates countrywide to help collect rental income tax.

The process will start with Nairobi then move on to Mombasa and Kisumu before panning out to all the 47 counties.

“The project is in progress and is expected to be rolled out next year,” KRA commissioner for domestic taxes at large taxpayers’ office Pancrasius Nyaga, told the Nation on phone.

The move is part of reforms targeting to bring aboard non-compliant businesses in the informal sector.

“As accountants, we see the need for Kenyans to remit taxes especially the informal sector that employs 60 per cent of the population,” accountant-general at the National Treasury Bernard Ndung’u said. He spoke during the 2014 FireAward briefing whose winners will be announced Friday evening.

Already, KRA has engaged the government and private institutions to compile data on all property owners in the country.

The team is working under the Kenya National Spatial Data Infrastructure project to map out land parcels and properties. Information collected will show houses, names of landlords and PIN numbers.

Mr Nyaga said landlords are classified within the informal sector and have in the past, evaded the tax net.

“Landlords who do not comply will be penalised from the second year of non-compliance, they will pay 20 per cent of the cumulative tax and an additional two per cent every month,” Mr Nyaga said.
Landlords will pay tax based on pay as you earn bands after deducting expenses related to management and financing costs.

For instance, a rental income of up to Sh15,000 is subjected to 15 per cent tax. KRA will take 20 per cent for rental income in the range of Sh19,000 to Sh20,000. The rates will, however, be revised according to industry trends.