Gov't pushes to collect more tax from landlords

The government has stepped up efforts to collect more tax from landlords through a new digital system meant to make it easier to declare and pay rental income.

President William Ruto said the Kenya Revenue Authority (KRA) is now using the electronic rental income tax system to ensure landlords pay the correct monthly rental income tax, which is charged at 7.5 per cent of gross rent.

The system, known as eRITS, allows property owners to register their buildings, list their tenants, calculate the tax, and pay monthly through eCitizen or the KRA portal.

Landlords must file every month, even when rent has not been received.

The President said the aim is to raise rental income tax collections from the current Sh14 billion to Sh80 billion annually.

Dr Ruto said Kenya cannot continue relying on a small group of taxpayers while many others remain outside the tax net.

He noted that out of 20 million registered taxpayers, only three million in formal employment contribute more than Sh600 billion every year, while the remaining 17 million pay just Sh17 billion combined.

The President said this imbalance must change, adding that every sector must carry its fair share of responsibility.

He said KRA has now created a special department to support micro and small taxpayers, including more than one million small businesses already in the system and another five million expected to be onboarded.

He explained that technology is now at the centre of Kenya’s tax reforms.

Revenue services have been moved to eCitizen, cutting compliance time by 40 per cent for individuals and small businesses. KRA has also started testing artificial-intelligence tools to detect tax evasion and improve accuracy in customs and domestic taxes.

The President said the Customs Department posted its highest monthly performance last month, collecting Sh85 billion.

Dr Ruto urged KRA to keep simplifying services and improving trust with taxpayers, adding that every shilling collected must translate into better services.

"Taxes help keep children in school, support health facilities, build infrastructure and strengthen public institutions," he said.

He called for honesty, fairness and shared responsibility in tax payment, saying nation-building depends on citizens who contribute and institutions that serve transparently.

The President said Kenya is targeting Sh3 trillion in revenue this financial year, and that all government ministries are expected to show value for every shilling spent.

He reiterated the government's resolve to continue sealing leakages, cutting waste and directing funds to programmes that create the highest economic and social impact, especially those that support young people, small businesses and local enterprises.

The President was speaking during the 2025 Taxpayers’ Day Awards Dinner, where he thanked compliant taxpayers and said Kenya’s future depends on a culture of integrity and responsibility in public finance.