NAIROBI, Kenya – The Kenya Revenue Authority (KRA) has unveiled a new Electronic Rental Income Tax System (eRITS), designed to simplify tax compliance for landlords and property owners in the real estate sector.
Built on KRA’s advanced Enterprise Integration Platform, Gava Connect, the eRITS system aims to promote voluntary compliance and streamline the tax process for real estate stakeholders.
The Principal Secretary to the National Treasury, Dr. Chris Kiptoo, highlighted the significance of the launch, calling it a major step toward enhancing the fairness and efficiency of Kenya’s tax system.
“The government remains committed to ensuring a fair and efficient tax system that contributes to national development. eRITS is a game-changer for the sector, moving us closer to a smarter and more efficient tax system that benefits both taxpayers and the government,” Kiptoo said during the official launch.
Echoing Kiptoo’s sentiments, Housing Secretary, Athman Said, emphasized that the real estate sector is poised to play a key role in Kenya’s development through improved tax compliance.
Said noted that with the new system, property owners are now equipped with a tool that will not only streamline their tax obligations but also contribute to the country’s overall economic growth.
The new eRITS system is designed to help rental property owners and agents calculate, file, and make payments for taxes seamlessly.
Commissioner General of KRA, Humphrey Wattanga, explained that eRITS integrates smoothly with KRA’s ecosystem through the Gava Connect API portal and the eCitizen platform, making the entire process more accessible.
“This system is about reducing administrative burdens and making tax compliance a shared responsibility,” Wattanga stated, adding that the goal is to encourage voluntary compliance while fostering nation-building.
Introduced in 2016, the Monthly Rental Income (MRI) tax targets landlords earning between Ksh 288,000 and Ksh 15 million annually.
The government recently reduced the MRI tax rate from 10% to 7.5% as of January 2024, marking a significant effort to ease the tax burden on landlords.
KRA’s success in the sector is already evident, as tax revenues collected through the MRI reached Ksh 14.4 billion in the 2023/2024 financial year, a 5.2% increase from the previous year’s Ksh 13.6 billion.
This growth highlights the impact of enhanced compliance and government initiatives.
The introduction of eRITS aligns with the broader goal of creating a tax environment that is fair, transparent, and conducive to national growth, ensuring that the real estate sector can contribute even more significantly to Kenya’s economic future.
The move also positions the KRA as a forward-thinking agency, committed to leveraging technology for efficient service delivery.
