Kenya revenue authority is now promoting its rental amnesty programme. If you pay your rental incomes taxes for 2014 and 2015 you will get amnesty for all the years you haven’t paid your taxes. The tax amnesty is valid from 1st July 2015 up to 30th June 2016.
Who is eligible for Tax amnesty?
If you pay your rental income for the years 2014 and 2015 then you will be pardoned for not paying the rest of your income tax. You will be eligible for 100% tax amnesty for any principal tax, interest and penalties that were due for 2013 and before.
.@KRACare now has a real estate section. It deals with Landlords, developers and other people who deal in real estate. #RentalAmnesty
A person is considered to either be an individual person or a company/legal person. Deceased landlords dependents are still eligible for amnesty. The estate admin, legal representatives or children of deceased landlords should account for taxes for rental income. Also individuals living in the diaspora. Landlords are supposed to charge VAT for rental income above 10 million. What are the terms? a) For 2013 and prior – 100% waiver on principal taxes, penalties and interest. b) For 2014 and 2015 – 100% waiver on penalties and interest. In addition, landlords who take up the opportunity will not be subjected to tax compliance checks or audit for 2013 and prior, 2014 and 2015 if they fully disclose undeclared rental income. Further, where expenditure records are not available, landlords will enjoy a deduction of forty percent (40%) of gross rental income as expenditure. A condition for this is that landlords have to declare their full rental income, file returns online and pay the principle taxes for 2014 and 2015. If they are unable to pay all of it now then they can ask to be able to pay in installments.
Those already assessed in respect of tax or are under audit or investigation because of undisclosed income will not get #rentalamnesty — Rayhab Gachango (@potentash) October 1, 2015
For those who choose not to take advantage of this amnesty there will be no mercy. KRA will go after the dues for the last 7 years and landlords will have to pay this in one month. If they are not able to pay KRA may be forced to auction their property, or ask the tenants to pay rent directly to them. The rental amnesty campaign is aimed at bringing on board 20,000 new landlords who will be expected to pay at least Kshs. 3 billion in revenue.
Here are some tweets from the talk we had last night with KRA. You can also check out the hashtag #RentalAmnesty.
From 2016 Landlords will be paying 10% of rental income as tax.This is down from the current 30%.This is good news. @KRACare#RentalAmnesty — Rayhab Gachango (@potentash) October 1, 2015
New tax regime has tax amnesty, simplified tax regime on rental income, reduced tax burden and reduced cost of compliance #RentalAmnesty — Rayhab Gachango (@potentash) October 1, 2015
Tax amnesty starts 1st July 2015 – 30th June 2016. Simplified flat tax rate regime on rental income starts on 1st Jan 2016. #RentalAmnesty — Rayhab Gachango (@potentash) October 1, 2015
The one thing that is of concern is that landlords will have to make their tax returns every month. That will be a problem. #RentalAmnesty — Rayhab Gachango (@potentash) October 1, 2015
Deceased landlords & Kenyans living in the diaspora must pay rental income.They quality for #RentalAmnesty. So if you inherited pay @KRACare — Rayhab Gachango (@potentash) October 1, 2015
There will be a tax amnesty certificate for those who pay their taxes for the last 2 years.So pay in full the amount you owe #RentalAmnesty — Rayhab Gachango (@potentash) October 1, 2015
.@KRACare now has an mpesa line. So you can even pay your rental tax right now. So you can pay from the comfort of your home #RentalAmnesty — Rayhab Gachango (@potentash) October 1, 2015
Benefits of #rentalamnesty Waiver of all taxes before 2013 You can enjoy deduction of expenses at 40% if no documentation — Rayhab Gachango (@potentash) October 1, 2015