Kenya Revenue Authority (KRA) has unveiled an Electronic Rental Income Tax System (eRITS) to foster voluntary compliance among landlords and property owners.
The system built on KRA’s Enterprise Integration Platform Gava Connect is set to streamline compliance for the real estate sector from a technology perspective.
Speaking during the launch, the Principal Secretary to The National Treasury Dr Chris Kiptoo hailed the launch of the new system as a significant milestone in the Government’s commitment to ensuring a fair and efficient tax system that will contribute to national development.
“The government is committed to ensuring that the tax system remains fair and that compliance is as seamless as possible,” Dr Kiptoo said. “With eRITS, we are moving towards a smarter, more efficient tax system that benefits everyone. With this system, we aim to not only increase revenue collection but also create a more equitable and predictable tax environment that benefits both taxpayers and the government.”
Dr Kiptoo’s remarks were echoed by the Housing Secretary of the State Department of Housing and Urban Development Athman Said, who said that the real estate sector is now poised to be a major contributor to Kenya’s overall development through tax revenue.
In his remarks, KRA commissioner general Humphrey Wattanga has said the system is a voluntary compliance tool that aims to support and enhance tax compliance among rental property owners and agents, adding that the system reflects KRA’s commitment to service excellence, efficiency, and continuous improvement.
“eRITS is designed to enable seamless integration with the KRA ecosystem for purposes of tax computation, filing, and payment and is accessible through the Gava Connect API portal for system-to-system integration, and as a service through the eCitizen platform,” Wattanga said. “The intention is to augment voluntary compliance within the sector while reducing administrative burdens associated with taxation.” He said. “With this launch, we are taking a bold step toward a future where tax compliance is not a burden but a shared responsibility for nation building.”
Introduced in 2016, the Monthly Rental Income (MRI) is applicable to landlords earning between KES288,000 and KES15 million annually. The MRI tax rate was reduced from 10% to 7.5%, from January 1, 2024, demonstrating the government’s commitment to easing the burden on taxation among taxpayers.
In the last financial year 2023/2024, tax revenues collected through MRI stood at KES14.4 billion, translating to a 5.2% year-on-year growth compared to a collection of KES13.6 billion and KES12.3 billion in the previous financial years.
