Nairobi landlords are a frustrated lot after Kenya Revenue Authority (KRA) officials turned their magnifying glasses on them in a new tax levy crackdown.
A report by The Standard on Sunday, March 1, documented that a section of the housing bosses had been paying visits to the authority’s Wilson offices in an attempt to negotiate downwards their levy.
Their woes date back to the Finance Act of 2015 which advocated that all rental owners are eligible for a deduction of 10 per cent from all their monthly revenues.
The new law went into effect commencing January 1, 2016.
Residents queue outside the Kenya Revenue Authority (KRA) office in Nyeri in June 2017 ahead of the deadline to file their tax returns.
So far, the authority officials have grilled more than 500 city rental owners regarding the remittance with many of them claiming that they were not aware of the levy. Some had accrued debts as high as Ksh1.5 million.
“We were not aware there had been passed such a law. We were just ambushed by letters demanding that we clear huge arrears. Soon after the initial notice letters, they started threatening us,” one landlord lamented to the publication after amassing a debt of Ksh1.35 million.
Some orders issued to a section of building owners in the city were ruthless in that they were expected to settle the bills within 14 days.
“You are required to pay the tax due within 14 days from the date of this letter failure to which we shall initiate necessary enforcement measures in line with the Tax Procedure Act 2015,” read a section of the letter.
The paper further noted that the exercise is being replicated across the rest of the country.
KRA tightened the noose against landlords after they noticed that most of them were not remitting correct figures during the voluntary disclosures and payments from rental income earners.
“We have noted that many property owners are not disclosing full and correct information regarding income received from their rental properties to avoid recruitment and payment of rental income tax,” stated KRA Deputy Commissioner for Policy and Tax Advisory Division, Caxton Ngeywo.
KRA Deputy Commissioner for Policy and Tax Advisory Division, Caxton Ngeywo, while at his office.