By Njiraini Muchira
The Kenya Revenue Authority has set in motion plans to compel landlords pay income tax on rent.
The tax collector has since established help desks across the country to facilitate easy compliance.
In a notice in local dailies, KRA also announced it will conduct sensitisation seminars for stakeholders in the real estate sector, a move seen as piling pressure on landlords to remit income tax on rent.
“ KRA wishes to inform the public that rental income of whatever description has always been taxable under Section 3(2) of the Income Tax Act Cap 470 of Laws of Kenya. Those in receipt of such incomes should, therefore, voluntarily declare and pay taxes due at the earliest opportunity,” said the statement.
Desks have been set up at its headquarters and all domestic tax offices countrywide to facilitate those willing to pay voluntarily.
The move by the taxman is a show of resolve to go after property owners, despite threats by consumer lobby groups to go to court on the basis that it will force landlords to increase rent, thus end up hurting tenants.
KRA Commissioner General, John Njiraini, has made it clear most landlords have been evading taxes by failing to remit income tax on rent, and that time had come for them to own up or face stiff penalities.
“Rental income has, like any other business income, been subject of taxation. Those who have not been paying therefore, have been evading tax, which has both criminal and civil liability implications,” he said.
The move to have property owners pay tax got impetus in the budget when Finance Minister, Robinson Githae, directed KRA to map out residential and commercial areas to ensure all landlords are brought into the tax net, and all taxes are paid.
