The Kenya Revenue Authority (KRA) has set its sights on more than one million landlords it suspects of collecting rent without declaring it. The announcement has sparked debate among property owners and tenants about who will eventually bear the cost.

In submissions to the National Assembly's Departmental Committee on Finance and National Planning on Wednesday, October 28, the taxman said it was using its Electronic Rental Income Tax System (eRITS) to identify landlords whose property records do not match their tax filings. The plan was reported by Kenyans.co.ke and People Daily.

How the system works

eRITS was launched in April 2025. It links to the eCitizen portal and KRA's own database and compares property registration data with tenant records and rental income declarations. Where a property appears to be earning rent but no return has been filed, the owner is flagged for follow-up.

KRA told MPs that geolocation mapping of rental properties is still being developed. It will also use Revenue Service Assistants on the ground to collect data, push compliance and monitor their own performance more closely.

Who is targeted

The drive focuses on resident landlords who earn between Sh288,000 and Sh15 million a year in residential rent. That works out to between Sh24,000 and Sh1.25 million a month.

  • The tax is charged at 7.5 per cent of gross rent as a final tax, a rate in force since January 2024.
  • No deductions are allowed for expenses such as repairs, loans or losses.
  • Returns and payments are due monthly, by the 20th of the following month.
  • Landlords who earn less than Sh288,000 a year are exempt, and commercial property income falls outside the monthly regime.

Why KRA is pushing now

KRA estimates that illicit trade, counterfeiting and tax evasion cost the government about Sh153 billion a year, and attributes about 65 per cent of that loss to undeclared rental income. The authority faces an ordinary revenue target of Sh2.98 trillion in the 2026/27 financial year, within total projected government revenue of Sh3.63 trillion.

A word of caution

People Daily noted that a mismatch in the records is not proof that a landlord has evaded tax. Land and property registers can be outdated, buildings may have changed hands, and some ownership arrangements, such as family or jointly held property, are not clear on paper.

Tenants are also watching closely. With inflation at 7.3 per cent in October, housing groups have warned in the past that landlords facing new tax bills tend to recover the money through higher rent, especially in high-demand areas of Nairobi and other towns.

For landlords already filing, KRA's advice remains the same: declare gross rent monthly through iTax and pay by the 20th to avoid penalties and interest.

Photos: People Daily; LittleT889/Wikimedia Commons (CC BY 4.0). Thumbnail design: HAMASTA MEDIA.