Digital shift as KRA targets real estate with new tax platform

The Kenya Revenue Authority (KRA) has introduced a new digital platform aimed at making tax filing easier for landlords, as part of a larger plan to boost voluntary compliance and reduce administrative barriers in the real estate sector.

The Electronic Rental Income Tax System (eRITS), which was officially launched on Thursday, will allow property owners to compute, file, and pay their monthly rental income taxes through a user-friendly online interface.

The system is built on the Gava Connect platform, a broader government initiative designed to centralize and simplify access to public services.

Landlords will now be required to access the new system either through the Gava Connect API portal or via the eCitizen platform, both of which offer system-to-system integration and direct service access.

The move is targeted at individuals earning annual rental income between Ksh288,000 and Ksh15 million, who are required by law to pay 7.5 percent of their gross income in taxes each month.

"eRITS is designed to enable seamless integration with the KRA ecosystem for purposes of tax computation, filing, and payment; and is accessible through the Gava Connect API portal for system-to-system integration, and as a service through the eCitizen platform," said KRA Commissioner-General Humphrey Wattanga.

According to Wattanga, the launch of this system is part of KRA’s broader strategy to increase compliance while making the tax process easier for landlords and rental agents.

"The intention is to augment voluntary compliance within the sector while reducing administrative burdens associated with taxation," he added.

The eRITS platform positions landlords among the first users of the wider Enterprise Integration Platform, Gava Connect.

This system is not just meant to automate tax payment but also to modernize tax management for sectors previously viewed as difficult to regulate.

Speaking during the launch event held in Nairobi, Treasury Principal Secretary Dr. Chris Kiptoo said the initiative marks a shift toward smarter governance and improved public service delivery.

"The government is committed to ensuring that the tax system remains fair and that compliance is as seamless as possible. With eRITS, we are moving towards a smarter, more efficient tax system that benefits everyone. With this system, we aim to not only increase revenue collection but also create a more equitable and predictable tax environment that benefits both taxpayers and the government," Kiptoo said.

The system was also welcomed by officials from the State Department of Housing and Urban Development, who emphasized the growing importance of the real estate sector in contributing to national development through taxation.

KRA introduced the Monthly Rental Income (MRI) tax in 2016 to target property owners in a sector long considered challenging to monitor.

Initially set at 10 percent, the tax rate was reduced to 7.5 percent in January 2024 to encourage more landlords to comply voluntarily.

In the 2023/2024 financial year, landlords remitted Ksh14.4 billion in MRI tax, marking a 5.2 percent increase from Ksh13.6 billion collected the previous year.

This growth, although slower than previous periods, indicates continued efforts by the taxman to bring more property owners into the tax net.

By streamlining the rental tax process through eRITS and linking it to a broader digital ecosystem, the government hopes to foster a culture where tax compliance is no longer seen as a burden but as a shared responsibility in building the country.