Kenya has witnessed unprecedented growth in the real estate sector, more notably in Nairobi and its outskirts, which according to the KRA is not commensurate to the contribution to the tax kitty.
This has been interpreted to mean that errant landlords do not remit tax to the exchequer as prescribed by the tax legislation. To cure this mischief, the Finance Minister in his budget statement read on 14 June 2012 outlined measures Kenya Revenue Authority intended to bring non-compliant landlords into the tax net.
This has brought about speculations of rent hikes to offset the tax man’s demands. In an effort to clarify the issue, the KRA issued a public notice on on taxation of rental income.