The Kenya Revenue Authority (KRA) has launched the Electronic Rental Income Tax System (eRITS), a digital platform designed to streamline tax compliance for landlords and property owners in Kenya. This initiative is part of KRA’s broader strategy to modernise tax collection and expand the tax base.
The system, built on KRA’s Enterprise Integration Platform Gava Connect, is set to streamline compliance for the real estate sector from a technology perspective.
In recent years, KRA has intensified efforts to enhance tax compliance among landlords. By June 2024, these initiatives led to the recruitment of 10,425 new rental income taxpayers, contributing approximately Sh3.87 billion in revenue.
This success was largely attributed to the implementation of the Block Management Strategy (BMS), which utilised geographic information systems to map properties and identify non-compliant landlords.
Despite these efforts, compliance challenges persisted. An analysis covering the year 2022 revealed that collections from residential rental income taxes fell short of projections by Sh27 billion.
In the last financial year 2023-24, tax revenues collected through MRI stood at Sh14.4 Billion, translating to a 5.2 per cent year-on-year growth compared to a collection of Sh13.6 Billion and Sh12.3 Billion in the previous financial years.
In response, the government decided to enhance the registration of property agents, map properties more effectively, and leverage technology to address these challenges.
eRITS: A Technological Solution
By providing an online platform for tax computation, filing, and payment, eRITS reduces administrative burdens and encourages voluntary compliance among landlords. The system enables seamless integration with the KRA ecosystem for these processes. Specifically, eRITS is accessible through the Gava Connect API portal for system-to-system integration, and as a service through the eCitizen platform.
This accessibility aims to augment voluntary compliance within the sector while reducing the administrative burdens associated with taxation. This system aligns with KRA’s broader efforts to modernise operations and integrate technology into tax collection processes.
KRA Commissioner General, Humphrey Wattanga, stated that eRITS is a voluntary compliance tool that aims to support and enhance tax compliance among rental property owners and agents, adding that the system reflects KRA’s commitment to service excellence, efficiency, and continuous improvement.
“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. The intention is to augment voluntary compliance within the sector while reducing administrative burdens associated with taxation,” said Wattanga.
National Treasury Principal Secretary Chris Kiptoo: “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.”
