KRA rolls out new eRITS system to simplify rental income tax compliance for landlords

Landlords across Kenya will now be able to file and pay their rental income taxes with greater ease, following the Kenya Revenue Authority’s (KRA) rollout of a new electronic system designed to simplify compliance in the real estate sector.

The Electronic Rental Income Tax System (eRITS), unveiled on Thursday, is now live on the Gava Connect platform and is tailored to help property owners meet their tax responsibilities more efficiently.

The system supports both direct service access through the eCitizen platform and system-to-system integration via the Gava Connect API portal.

According to KRA Commissioner-General Humphrey Wattanga, the initiative is designed to reduce the tax burden for landlords while boosting compliance. “eRITS is designed to enable seamless integration with the KRA ecosystem for purposes of tax computation, filing, and payment.

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

Wattanga emphasized that the platform serves as a voluntary compliance tool, reflecting KRA’s commitment to modernizing service delivery. He noted that property owners and rental agents stand to benefit from this step toward efficiency and continuous improvement.

The system is open to individuals earning rental income ranging from Sh288,000 to Sh15 million annually.

These landlords are required to pay a monthly tax rate of 7.5 percent on their gross rental income. The rate was lowered from 10 percent at the beginning of 2024 in a move aimed at easing the tax load and encouraging greater compliance.

Expanding national tax base

Landlords, previously considered a hard-to-tax group, are now central to the KRA’s efforts to expand the national tax base.

In the last financial year ending June 2024, the real estate sector contributed Sh14.4 billion in rental income taxes, a 5.2 percent increase from the previous year’s Sh13.6 billion.

At the launch event in Nairobi, Treasury Principal Secretary Dr. Chris Kiptoo said the system is an example of how technology can be used to make governance more efficient and inclusive.

“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.

His sentiments were echoed by Housing Secretary Athman Said, who highlighted the potential of the real estate sector to drive national development through increased tax revenue.

The eRITS platform is part of the larger Enterprise Integration Platform under the Gava Connect umbrella, which the government introduced to bring public services together in a centralised digital space.

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Its integration into this system signals a shift in how tax collection is managed, with more emphasis placed on accessibility and user convenience.

Since its introduction in 2016, the Monthly Rental Income (MRI) tax has become a key part of real estate revenue collection. The recent upgrade through eRITS represents another step in aligning tax practices with modern digital trends.

With the launch of this platform, KRA aims to make tax obligations easier for landlords while improving overall tax performance in the country. The hope is to create an environment where tax compliance becomes routine and less of a challenge for property owners.