KRA targets 20,000 additional landlords in tax amnesty

Landlords in Kenya have up to June next year to take advantage of the rental tax amnesty that has been offered by the government beginning July 1, 2015.

The one year amnesty period which closes on June 30, 2016 seeks to officially pardon individual landlords for income tax evasion and omissions on rental income and is expected to bring on board an additional 20,000 landlords.

The exercise that kicked off on July 1, 2015 targets to raise Sh3billion and the tax amnesty returns will be available in the taxman’s iTax system. Those landlords who will apply and successfully be granted the rental amnesty will be issued with a tax certificate by the Commissioner.

KRA Rental Amnesty is only available to individual landlords who earn an income from occupation or use of their rental property. Companies owning rental properties do not qualify for the amnesty.

According to the Kenya Revenue Authority, this is a rare opportunity that all landlords should take advantage of. “We are putting in place measures to monitor, on a daily basis who is applying for amnesty. We now have better technology. In 2003, for instance, our level of technology was not up todate and therefore, tracking amnesty was a bit challenging but now we can take advantage of such technology avenues as iTax.” KRA, which currently has a database of 100,000 landlords,  is optimistic that by June next year, they will start giving the public a report on the level of application, and the amount of revenue. This is to be able to track those who have taken up the amnesty. The Authority arrived at the decision after realizing low tax compliance on rental income by landlords as a result of fears over huge back taxes for the past years. KRA, however, believes that this exercise will not affect the property market since there is still a growing population and huge demand for housing is likely to grow parallel to population growth. Individual landlords who will voluntarily disclose undeclared rental income for 2014 and 2015 and submit returns will be eligible for full tax amnesty. Deceased individual landlords will, too, be eligible for the amnesty. Says KRA: “The estate administrator or legal personal representative is allowed to account for tax on rental income on behalf of the deceased and therefore can apply for the amnesty.”   Other individual taxpayers eligible for the amnesty include Kenyans living outside the country, as long as they voluntarily declare their returns and pay principal tax due on rental income for this year (2014) and last year (2015).

Those who do not comply and take advantage of the amnesty will have their property auctioned by the Kenya Revenue Authority. KRA will also issue agency notices to banks and third parties to recover tax.


To apply for rental amnesty, click here

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