The Kenya Revenue Authority (KRA) is taking steps to enhance rental income tax compliance among landlords and property owners with the launch of the Electronic Rental Income Tax System (eRITS).
At the system’s unveiling, Dr. Chris Kiptoo, National Treasury Principal Secretary, explained that eRITS, developed on KRA’s Enterprise Integration Platform, Gava Connect, aims to simplify the compliance process for the real estate sector using modern technology. “The government is committed to ensuring a fair tax system, making compliance as seamless as possible. With eRITS, we’re moving towards a smarter, more efficient system that benefits everyone,” Kiptoo noted.
KRA Commissioner General Humphrey Wattanga emphasized that eRITS is a voluntary compliance tool that helps improve tax adherence among rental property owners and agents. “eRITS integrates seamlessly with KRA’s ecosystem for tax computation, filing, and payment. It’s accessible via the Gava Connect API for system-to-system integration and through eCitizen for individual use,” Wattanga said. The system aims to reduce administrative challenges and foster voluntary compliance within the sector.
The Monthly Rental Income (MRI) tax, which was introduced in 2016, applies to landlords earning between Ksh 288,000 and Ksh 15 million annually. As of January 1, 2024, the MRI tax rate was reduced from 10% to 7.5%, easing the tax burden on landlords.
For the 2023/2024 financial year, the MRI tax generated Ksh 14.4 billion in revenue, marking a 5.2% increase from the previous year.
