The Kenya Revenue Authority (KRA) now wants real estate agents to submit information on ownership and tenancy of buildings in an effort to increase tax compliance.
KRA has asked property owners to provide information such as owner’s name, owner’s PIN number, number of units, occupier (owner/tenant), rent paid, and first rent out.
“Please note that the information will strictly be used for the tax compliance purposes. Kindly provide information within seven days from the date of this letter,” a letter from KRA read.
The requirement comes after banks notified their customers and individuals applying to open bank accounts to submit their KRA PIN numbers.
KRA Under Mounting Pressure to Increase Revenue Collection
The Authority is under mounting pressure from the government to hit its targeted revenue collection figure which will fund President Uhuru’s Big Four agenda.
In a gazetted notice, the National Treasury said the Authority was Sh240 billion short of collecting the targeted Sh1.4 trillion for the 2017/18 financial year.
Although the Authority has enhanced revenue administration and collection significantly since the tax reform programme kicked off in 1986, it has for some time failed to meet revenue targets for funding budget proposals.
As a result, the effectiveness of KRA’s tax reforms and modernisation strategy has been questioned with fears that the challenges they faced before the reforms have not yet been solved.
Experts believe that the challenges that inhibit effective tax design are taxing the agriculture and informal sectors and refunding zero-rated transactions.
Kenya has also been blamed for having low tax competitiveness and being one of the most tax unfriendly places in the world.
Although the tax system in Kenya has been criticised, KRA improved the speed of submitting tax returns this year which increased the number of Kenyans who filed their income tax returns to more than 3.2 million.