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Impact of 30% rental income tax on housing development in Kenya
chiaroscuro
#151 Posted : Tuesday, June 19, 2012 11:35:22 AM
Rank: Veteran

Joined: 2/2/2012
Posts: 1,134
Location: Nairobi
alma wrote:
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.


Have a cup of tea/coffee on me!

The problem with Kenyans is that they like to pretend they don't know the law, even when it is right in front of them.

For many years Kenyans have filled-in tax return forms (LIKE THIS ONE: http://www.kra.go.ke/notices/pdf2012/IT12011.pdf) and right there on page one, you will find PART C: RENTAL INCOME!

That section was put there long before Njeru Githae was born!!!!!

BUT when some ignorant news reporter (are there any informed news reporters in this country?) goes on air and proclaims that the minister has introduced new taxes on rental income, Kenyans buy the lie hook, line and sinker.

Here is Githae's budget statement: http://www.treasury.go.k...-statement-distribution

Some one show us where the Minister said that there will be a new tax on rental income.

What I read is para 91:

91. Mr. Speaker, over the recent past, many patriotic Kenyans have invested heavily in real estate thereby promoting access to housing for our people. To ensure fairness and also allow this class of citizen to contribute toward our nation building, the Kenya Revenue Authority will shortly embark on mapping out all residential and commercial areas and implement a comprehensive strategy to ensure that all landlords are effectively brought into the tax net and all rental income taxes due are paid.

That is NOT and introduction of new tax! It is ensuring that the tax due is paid in full.
quicksand
#152 Posted : Tuesday, June 19, 2012 11:37:21 AM
Rank: Veteran

Joined: 7/5/2010
Posts: 2,061
Location: Nairobi
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?
chiaroscuro
#153 Posted : Tuesday, June 19, 2012 11:44:37 AM
Rank: Veteran

Joined: 2/2/2012
Posts: 1,134
Location: Nairobi
quicksand wrote:
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?


Githae needed to make that statement for two reasons:
[1] to give KRA political backing. If KRA had woken up one day and started netting in the landlords, the landlords would have sent a delegation to Githae's office to lobby hime to tel KRA to "Ngo srow"

[2] Githae has a big hole in the bidget and he needs to convince the nation that he has taken enough measures to seal it. had he not made the statement, you can be sure a "patriotic" MP (are there any?)would have asked him in parliament why his mboys at KRA are not collecting taxes from landlords in the thriving building industry.
jaggernaut
#154 Posted : Tuesday, June 19, 2012 1:36:31 PM
Rank: Elder

Joined: 10/9/2008
Posts: 5,389
Aguytrying
#155 Posted : Tuesday, June 19, 2012 4:12:47 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
What an informative thread.
With or without(to those avoiding) the rental income tax, i find other investments yielding much higher than real estate and i prefer them. Eg stocks, bonds, t bills.
The investor's chief problem - and even his worst enemy - is likely to be himself
Lolest!
#156 Posted : Tuesday, June 19, 2012 4:16:42 PM
Rank: Elder

Joined: 3/18/2011
Posts: 12,069
Location: Kianjokoma
VituVingiSana wrote:
]It's a slow process but if the Taxman wants to determine how many units are rented, it will ask the landlord to certify how many units are occupied. Then it can 'raid' all the vacant properties to see if they are rented. Finally, it can access electricity & water records of each unit. If Flat A uses 1,000 KW monthly & is occupied, why is Flat B using 1,000 KW yet is unoccupied?


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.
Laughing out loudly smile Applause d'oh! Sad Drool Liar Shame on you Pray
kyt
#157 Posted : Tuesday, June 19, 2012 4:44:36 PM
Rank: Elder

Joined: 11/7/2007
Posts: 2,182
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Gadaffi
#158 Posted : Tuesday, June 19, 2012 6:31:25 PM
Rank: Member

Joined: 2/13/2011
Posts: 284
Location: Nairobi
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
QW25091985
#159 Posted : Tuesday, June 19, 2012 6:44:50 PM
Rank: User

Joined: 1/24/2012
Posts: 1,675
Location: In Da Hood
Aguytrying wrote:
What an informative thread.
With or without(to those avoiding) the rental income tax, i find other investments yielding much higher than real estate and i prefer them. Eg stocks, bonds, t bills.



i hope you donot invest in the at the same time !
But real estate has allot of money . and hey we are in a property boom so whereelse would you be ?
Aguytrying
#160 Posted : Tuesday, June 19, 2012 11:03:38 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
QW25091985 wrote:
Aguytrying wrote:
What an informative thread.
With or without(to those avoiding) the rental income tax, i find other investments yielding much higher than real estate and i prefer them. Eg stocks, bonds, t bills.



i hope you donot invest in the at the same time !
But real estate has allot of money . and hey we are in a property boom so whereelse would you be ?


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.
The investor's chief problem - and even his worst enemy - is likely to be himself
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