KRA ropes in more landlords to collect Sh5.2b in six months

Last year, KRA only managed to raise Sh2 billion after some landlords managed to slip through its fingers as it intensified tax compliance PHOTO: COURTESY

Kenya Revenue Authority (KRA) has collected Sh5.2 billion in rental income within six months after netting 36,000 landlords this year.

The tax man says he is on course to collecting an additional Sh5 billion to hit his Sh10 billion target by the end of the year.

Last year, KRA only managed to raise Sh2 billion after some landlords managed to slip through its fingers as it intensified tax compliance.

“By implementing the withholding tax on rental income initiative and other measures highlighted, KRA is targeting to recruit 20,000 new landlords and collect an additional Sh5 billion in 2016/2017 financial year,” said Commissioner Domestic Taxes Department Benson Korongo.

KRA has been keen on expanding its tax base to capture rental income over the last few years. It offered a tax amnesty to landlords as it sought to bring on board 20,000 new landlords who were expected to pay at least Sh3 billion in tax.

KRA also used strong-armed tactics after it sent tax compliance notices to more than 60,000 landlords across the country and is expected to conduct a countrywide crackdown.

The taxman has recently sent out guidelines seeking to recruit tenants, real estate agents, Government departments, agencies and ministries from January in a bid to bypass landlords who have been slow in remitting rental income tax as he seeks to raise Sh500 million in the next six months.

So far, KRA has identified 1,000 corporate tenants and property agents to appoint as withholding tax agents for rent payable to landlords.

“KRA has identified all corporate tenants (public and private institutions) with extensive branch networks for appointment as withholding tax agents for rental payable to their resident landlords. In addition, KRA has also identified property agents who qualify to be appointed as agents,” said Mr Korongo.

The appointment is being done via the iTax system and agents are being notified via their email addresses and letters.

Payment of withheld tax shall also be done via the iTax system.

Sensitisation seminars and necessary capacity building sessions for appointed agents will commence in January.

The taxman has also been using third party information from public and private institutions to identify rental property owners who are not tax compliant.