Landlords, tenants unite against tax – Survey

June 27, 2012
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Most people are worried that landlords will pass on the increased costs to tenants through a hike in rent prices if it’s implemented/FILE

, NAIROBI, Kenya, Jun 27 – The directive by Finance Minister Njeru Githae for the Kenya Revenue Authority to collect taxes from all landlords in the country has been opposed by a majority of homeowners and tenants, according to a new study by Ipsos Synovate.

The survey conducted between June 18 and June 21 indicates that 64 percent of Kenyans do not support this proposal, with 61 percent of tenants and 74 percent of landlords being against the tax move.

Most people are worried that landlords will pass on the increased costs to tenants through a hike in rent prices if it’s implemented.

The survey polled 1,013 Kenyans aged 18 years and above in both rural and urban, and Ispos Synovate Managing Director Maggie Ireri said that it’s common practice that once taxes are imposed on a product or service, the cost often ends up being passed to the end user, which in this case would be the tenants.

The new tax reforms will see Kenyan landlords who earn more than Sh10,000 from rental houses paying tax at the prevailing Pay-As-You-Earn rates.

According to the Kenya National Bureau of Statistics (KNBS), the inflation rate dropped from 13.06 percent in April 2012 to 12.65 percent in May 2012.

Despite this decline, the effects are yet to trickle down to Kenyans as they are still struggling with high costs of basic commodities.

There were no strong likes for any of the budgetary proposals, as the highest issue generated only 10 percent approval by those surveyed who said the removal of tax from food supplements was what they liked most about the budget.

In the past, the budgetary proposals have sought to put in place provisions that have a direct and almost immediate impact on the common mwananchi.

In this budget, Ireri acknowledged that as much as the proposals will benefit Kenyans in the long run, the effects may not be realized immediately as there were no subsidies on basic commodities.

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