KRA targets Sh3bn in tax amnesty for rental income

September 15, 2015
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Landlords who take up the opportunity will not be subjected to tax compliance checks or audit for 2013 and prior, 2014 and 2015 if they fully disclose undeclared rental income. Photo/ FILE
Landlords who take up the opportunity will not be subjected to tax compliance checks or audit for 2013 and prior, 2014 and 2015 if they fully disclose undeclared rental income. Photo/ FILE

, NAIROBI, Kenya, Sep 15 – The Kenya Revenue Authority (KRA) has launched a nationwide campaign on tax amnesty for rental income that aims to create awareness and enhance voluntary compliance by landlords.

The campaign which is aimed at bringing on board 20,000 new landlords who will be expected to pay at least Sh3 billion in revenue, is valid from July 1, 2015 up to June 30, 2016.

The amnesty includes a 100 percent waiver on principal taxes, penalties and interest for 2013 and 100 percent waiver on penalties and interest for 2014 and 2015.

Further, where expenditure records are not available, landlords will enjoy a deduction of 40 percent of gross rental income as expenditure.

In addition, landlords who take up the opportunity will not be subjected to tax compliance checks or audit for 2013 and prior, 2014 and 2015 if they fully disclose undeclared rental income.

The condition for tax amnesty qualification is the full declaration of the rental income, online filing of the returns and payment of principal taxes for 2014 and 2015 immediately.

KRA’s Commissioner General, John Njiraini said the campaign is designed to give landlords the opportunity to come forward and disclose any unpaid or underpaid tax.

“The aim of this campaign is to encourage landlords who have not been paying tax to declare and voluntarily pay any undisclosed tax,” said Njiraini.

The taxman has so far netted a total of 20,000 landlords into the tax bracket and has targeted to bring on board another 20,000 this financial year (2015/16) as part of the tax amnesty campaign.

Njiraini observed that the real estate sector (building and construction) in Kenya has witnessed an annual average growth rate of 7.2 percent between 2008 and 2014.

Despite this significant growth, tax revenue from this sector has not been commensurate.

Njiraini warned those landlords who fail to fully disclose tax due during the amnesty period that they will be subjected to compliance audits and tax payment enforced as per the law.

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