INCREASE IN MONTHLY RESIDENTIAL RENTAL INCOME TAX (MRI) THRESHOLDThe Finance Act 2015 introduced a new Section 6A in the Income Tax Act Cap 470 Laws of Kenya, which provided for a simplified tax regime on residential rental income as follows; ‘A simplified rate of 10% tax on gross residential rental income is payable to KRA by 20th of the following month with effect from 1st January, 2016 if the income falls within the threshold of Kshs. 144,000 – Kshs.10m per annum‘. However, with the signing of the new Finance Bill 2020, the Act increases the upper threshold of Residential Rental Income from Kshs 10 million to Kshs. 15 million per annum. In addition, it aligns the lower threshold from Kshs 144,000 to the current lower individual tax band of Kshs 288,000 per annum with effect from 1st January 2021. The changes adopted widens the scope by looping in landlords earning a higher rental income than previously allowed into the simplified MRI regime. The Amendment of the Finance Act Tax article on Monthly Residential Rental Income Tax is written in general terms for guidance only and are not substitute for professional advice or the Law. Whilst every care has been exercised in ensuring the accuracy of information contained herein, we will not accept any responsibility for errors or omissions or for any action taken, or refraining from action without appropriate professional advice |
3,545 comments on this post