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.
— Rayhab Gachango (@potentash) October 1, 2015
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.
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.