Revealed! Why your rent is set to go up this year
Tenants will have to dig deeper into their pockets as landlords will be rushing to pounce on the lucrative business to counter the move by KRA.
The taxman had instated measures to curb the leaking rental income, targeting to raise revenue to a tune of Sh3 billion.
This means the tenants will have to dig deeper into their pockets as landlords will be rushing to pounce on the lucrative business to counter the move by KRA.
Landlords failed to comply with a directive to pay 10 percent tax on income from rent despite the authority’s move to issue a six month amnesty.
Despite the vibrancy of the sector, the actual contribution accrued by KRA has been less than a billion shillings.
According to the authority, the sector players have been uneasy to nab.
KRA’s Domestic Taxes Deputy Commissioner Mr. James Ojee said the authority has resorted to going out in full force for the failures.
Earlier in a public notice to the public, KRA had committed to pardon landlords who would take up the opportunity of the amnesty and pay.
Equally, the authority vowed to spare such landlords in the routine checks or audit for 2013 and prior, 2014 and 2015, on condition that they fully disclose undeclared rental income.
Further, KRA had directed that where expenditure records are not available, landlords will enjoy a deduction of 40 percent of gross rental income as expenditure.
The condition for tax amnesty qualification was, however, the full declaration of the rental income, online filing of the returns and payment of principal taxes for 2014 and 2015 immediately.
In the backdrop of this, KRA has given priority to the issue by appointing all corporate tenants (public and private institutions) with extensive branch networks for appointment as rent withholding tax agents.
In addition, KRA has also identified property agents who qualify to be appointed as agents. The agents will help in spearheading the collection of the dues.
The appointed agents are being notified about their obligations to the new law via their official email addresses.
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