The Kenya Revenue Authority (KRA) has identified more than one million property owners who collect rent without declaring it for tax, in a fresh drive to seal one of the biggest gaps in government revenue.
In submissions to the National Assembly’s Departmental Committee on Finance and National Planning on Wednesday, October 28, 2026, the taxman said the landlords were flagged by a digital system that compares property records with rental income declarations.
KRA says undeclared rental income accounts for about 65 per cent of the roughly Sh153 billion the government loses every year to illicit trade, counterfeiting and tax evasion.
To bring the landlords into the tax net, KRA will rely on the Electronic Rental Income Tax System (eRITS), launched in April 2025. The system is designed to integrate with the eCitizen portal and match property registration data, tenant records and rental declarations. KRA is also developing geolocation mapping to pinpoint rental properties.
The authority says eRITS will help close the gap between the value of property and the income owners report in their tax returns. KRA field officers, known as Revenue Service Assistants, are supporting the drive by collecting data and helping landlords comply. The system will also help the authority monitor their work.
The drive targets resident landlords earning between Sh288,000 and Sh15 million a year in rent. Landlords who earn less than Sh288,000 a year, or Sh24,000 a month, are not required to pay the tax. Those in this income bracket pay Monthly Rental Income Tax at a rate of 7.5 per cent of gross rent, a rate that took effect in January 2024.
The tax is final, so no expenses or losses are deducted. Landlords enter their gross earnings into the system, which calculates the tax due, and returns must be filed by the 20th of the following month.
The push is part of a wider KRA effort to widen the tax base and raise revenue without introducing new taxes. The authority has also told MPs that it plans to use mobile payment data, including M-Pesa till numbers and Pochi la Biashara accounts, to find businesses with undeclared income, and to audit employers whose PAYE and Housing Levy remittances do not match the size of their workforce.
KRA collected Sh2.844 trillion in the financial year that ended in June 2026, against a target of Sh2.977 trillion. The National Treasury has set its ordinary revenue target for the 2026/27 financial year at Sh2.98 trillion.
