Kenya: Taxman Doubles Property Tax Collection to Sh2.1 Billion

The taxman has doubled collections from property developers and landlords in the fiscal year ended June 30, as efforts targeting the sector’s tax avoidance yield result.

The Kenya Revenue Authority yesterday said it has collected Sh2.1 billion from the sector from Sh1 billion in the previous year.

KRA had accused developers and landlords of playing cat and mouse games with it while they should have been compliant.

Alice Owuor, commissioner of domestic taxes in charge of medium and small taxpayer’s office, said KRA has roped in 400 new landlords and property developers who were previously not remitting taxes.

However, the collections fell acutely below KRA’s target of Sh4.4 billion. Owuor cited resistance to comply by some of the targeted players.

“Some raised objections and resolutions of such cases are at a different stages. There were some who chose to pay through instalments and that’s also ongoing,” she said.

The renewed efforts to rope in more taxpayers from the property sector have been ongoing since July 2012. So far, about 1,800 properties have been mapped, predominantly in Nairobi and a few in Mombasa, Kiambu and Nakuru counties.

“Our work has been slow because we are working with a small set of staff and the system is also very manual,” Owuor said.

National Treasury Cabinet Secretary Henry Rotich last year directed the KRA to go digital in tax collection and filing to ease the process.

Commissioner-General John Njiraini yesterday said an ICT mapping system for the real estate sector is still a “major investment priority” for the tax agency.

KRA is working with the Kenya Institute of Surveying and Mapping under the Ministry of Lands and the Ministry of ICT ministry to locate some of the elusive developers.

On January 27, ICT Secretary Fred Matiang’i announced plans to set up National Geo-Spatial Data Infrastructure to accurately locate people and companies including landlords and their assets.

Owuor said leveraging on ICT will net an extra Sh10 billion to the Exchequer by next June.

“The information about all of them is readily available through different institutions including utility companies. The challenge is that the data is scattered and once it’s integrated, no one will escape,” she said.