KRA to collect taxes on behalf of counties

The National Treasury has drafted new guidelines that will reform the Property Tax Act in a bid to net tax cheats and raise collections.

National Treasury Cabinet Secretary Henry Rotich says the new proposal will see the tax band on rental increased to include property owners with annual incomes surpassing Ksh10 million.

Speaking during the 7th Africa fiscal policy forum, the CS says there are too many loopholes that have made it easy for property owners to evade taxes.

Rotich further says under the reformed act, KRA would be tasked to collect land rates and other taxes on behalf of counties to streamline collections.

Introduced three years ago, rental tax compliance has been sluggish with few property owners filing their returns. This has prompted the Kenya Revenue Authority to hire more enforcement efforts while at the same time sealing loopholes within the act.

Rotich has said the new regulations will help promote equity since property tax is likely to be borne more by the rich who own more property as opposed to the poor.

KRA Commissioner General John Njiraini has said the revenue agency has deepened its engagement with property owners to tackle compliance issues which range from poor bookkeeping, complexity in the previous tax system and the general lack of awareness.

EU head of delegation Stefano Dejak has said fiscal policy needs to play a more fundamental role in fostering inclusive growth.

The treasury CS has said the government has commenced a fiscal consolidation program aimed at lowering the fiscal deficit that ensures debt sustainability.




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