I think landlords must pay taxes.I pay taxes on my meagre salary 30% why not them?
so they have been evading taxes all this time?

Vitu - Your contributions are value addition. What I meant with mulolongo type is those "train" type of houses with a toilets at the end. They can even be mabati type. They could also have be constructed on land with certificates. Landlord collecting rent is always cat and mouse thing. Tenant volatility is high. Then factor in that these are in large numbers all over kenya. It may prove to be a headache for KRA. Its akin to the informal sector businesses. The moment some fellas realize they can earn more from this type of houses than the formal ones, they will prefer investing here. EG. In Pipeline Embakasi, almost all the flats are tuu rooms with toilets per floor cause they fetch much more than the greenspan type. You can see how thing is booming.

So yes it may drive guys to invest more in these type of structures. They will pay tax but well below their real incomes.

If the city council and other councils have been able to collect taxes (aka licenses/fees) from both formal and informal businesses including hawkers and mama mboga, then it would be laziness on the part of KRA to say that it is not able to collect tax on any property - formal or informal. Maybe they should contract kanjo to collect the funds for them.

BTW Kenya Power, Nairobi water etc collect their dues every month from all these properties, both formal and informal. Maybe they should share their database with KRA.

We do not lack services because of tax evasion, it is because of mismanagement and corruption. Compare with countries like Finland where PAYE can go as high as 55%,..those guys are OK with that arrangement because that money is put to proper use. A corrupt govt whose leaders themselves don't pay any on their extravagant renumeration lose moral justification to impose more tax on its citizens. I WOULD CHEAT if I had the properties. What do you imagine will happen with the new monies collected?

The basis of this thread are fundamentally wrong.

There has been no tax increase!

So when someone can post here and say that they will cheat to avoid paying taxes coz HIS gov't is corrupt, exactly what does he expect those in HIS gov't to do? Be honest?

Again there has been no tax increase.

If, when you got your rental property you did not compute the impact of income tax on you, then you were cheating. Just like the squatters in Syokimau, you were going to pay one day.

The time has come so please stop using words like bad for the country, the thread should be moderated etc.

You are a cheat and you've been caught. Ripa!

When you say that properties with tu rooms will boom again realise that you may be talking about another illegality where you build substandard houses against the building code. I'm sure a4 can educate on those tu rooms you are talking about.

Again another illegality to hide from doing the right thing which is to pay tax. When will you stop?

In the end mbio za sakafuni huishia ukingoni.

So please pay your taxes and stop trying to make this a national crisis or a property investment crisis.

Those who've been paying their taxes will feel absolutely no effect with this.

Those who are complaining are the tax evaders and they should be treated with the contempt they deserve.

It is not a national issue. It is a personal issue which has absolutely no effect on the country other than increasing the national coffers from tax evaders.

Arm chair idealists .... rent will go up- thats a given. There is a difference between what happens on the ground and what people dream up in meeting rooms.
Wanjiku will be hit hard.
And probably KRA will not recover any substantial revenue at the end of the day due to logistics and trickery; That KRA was supposed to be netting these monies
even before this "clarification" by Githae but was not able to do so means
they don't have proper muscle to police this refresh properly. Even landlords who have been paying might see this as an opportunity to hike the rent and make the
additional revenue disappear down some cracks. KRA and Hon. Githae will not be there to arbitrate on your behalf when the landlord slaps you with a 50% raise, and brings
goons to throw your lovely wife and kids to the street when you don't comply.
This new edict by Githae was alarmist and pointless, they should have just gone ahead and started a staged implementation of recovering the moneys from landlords. the law is already in place, isn't it?

Here are the details of how the govt will collect the tax:

http://www.businessdailyafrica.com/How the taxman plans to get his share of rental incomes

Could be a relative being given free accommodation. Estate agents are known to steal from landlords this way by claiming that some units were unoccupied so that they pocket the rent. This is a loophole but KRA could audit the landlord's accounts to find the rent details.

Now cofex plans to go to court to stop the tax man from implementing processes that will lead to collection of rental income tax. cofex's argument does not however seem to have any legal grounds but only appears to be more humanitarian

3-6% income per annum? very low return on investment. Id do better with bonds/ t bills and stocks. That ROI Almost equal to parking cash on fixed interest rates in the bank.