Executive summary

The Kenya Revenue Authority (KRA) recently launched the Electronic Rental Income Tax System (eRITS), a digital platform designed to simplify rental income tax compliance for property owners/landlords and property managers/agents.

The innovation, introduced in April 2025, is part of KRA's Enterprise Integration and API Management (EAPI) initiative, which aims to enhance efficiency in registration, filing and payment processes.

It is also part of the tax base expansion initiatives by KRA's newly formed Small & Micro Taxpayers Department.

Detailed discussion

Background

The Monthly Rental Income (MRI) tax was launched in 2016 targeting landlords who earn between 288,000 Kenyan shillings (KES) and KES15m annually from residential rental income.

The government reduced the MRI tax rate from 10% to 7.5% of gross income, effective 1 January 2024.

Highlights

The eRITS platform supports voluntary compliance by integrating with existing Kenyan government digital platforms like eCitizen and GavaConnect.

Future integration with Ardhisasa (another Kenyan government digital platform, developed by the Ministry of Lands and Physical Planning in collaboration with the National Land Commission), which allows citizens, stakeholders and government entities to interact with land records and services online, as well as other decentralized county systems is anticipated to boost compliance through geo-referencing and data verification of rental properties and aligning them with taxpayer declarations.

By linking land ownership records with tax systems, eRITS is expected to enhance tax compliance and transparency as well as support the Tax Base Expansion initiative.

Implications

The introduction of eRITS does not lead to any change in the current tax compliance requirements for taxpayers. Eligible organizations should thus continue with their tax filings and payments as stipulated in the law.