Landlords who will heed to KRA’s window period to file tax records within the given time will not face penalties. To reinforce the call of amnesty, the Authority body has launched a nationwide campaign aimed at bringing on board 20,000 new landlords who will be expected to pay at least Kshs. 3 billion in revenue.
The campaign aims at creating awareness and enhancing voluntary compliance amongst land owners. Landlords who have not filed their taxes 2013 and prior will get 100% waiver on principal taxes, penalties and interest. Those who did not file for 2014 and 2015 will receive 100% waiver on penalties and interest.
In addition, landlords who will take up the responsibility will not be subjected to tax compliance checks or audit for 2013 and prior, 2014 and 2015 if they fully disclose undeclared rental income. However, those that will not have expenditure records available, they will be deducted of forty percent of gross rental income as expenditure.
Kenya revenue Authority will require landlords to fully declare their rental income, online filing of the returns and payments of principal taxes of 2014 and 2015 immediately. With the tax amnesty valid from 1st July 2015 to 30th June 2016, KRA is looking to bring on board another 20,000 this Financial Year (2015/16) as part of the tax amnesty campaign.
The amnesty was introduced through the Finance act 2015 when unrecognized progression of tax revenue was recorded between 2008 -2014 in the real estate and construction sector even after it clocked 7.2% growth within the period.
Among factors that have contributed to the incommensurate tax revenue from the sector are high cost of compliance, complex tax system, poor record keeping and huge back taxes as key factors hindering voluntary tax compliance among property owners.