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How Government intends to kill the construction industry
Rank: Elder Joined: 9/12/2006 Posts: 1,554
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Check this out http://www.revenue.go.ke...ationPack-09-8-12.pdf1. For resident individuals, the annual tax rates (on total annual income including net rent income) are as follows; On the first Kshs. 121,968 .......................10% On the next Kshs. 114,912 ...................... 15% On the next Kshs. 114,912 .................... 20% On the next Kshs. 114,912 .....................25% On all income over Kshs. 466,704.........30% Note: The above scales are referred to as “graduated”
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Rank: Elder Joined: 9/12/2006 Posts: 1,554
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Kaigangio wrote:Jamani wrote:Kaigangio wrote:Jamani wrote:Kaigangio wrote:I think the KRA fellows will not be interested in the interest on borrowed construction capital. They are interested in the gross rent collection minus nothing and applying 30% pap!!!
That is scary, it doesn't work that way anywhere in the world....even in Somali or DRC. Very true...but saaaaadly, it will work here!! Soma hiyo article tena and you will understand why we have pure breeds of IDIOTS in KRA!!! Haha okay, I get what you mean and will keep my ears on the ground. Though the best way out of this KRA - landlord issue is to incorporate. Do you know why the KRA said they would carry out mapping physically on the ground??? I still think the KRA has another ulterior motive...They probably register your property and they be sending you the rentals tax bill at the end of the year irrespective of whether it is a company asset or not, Uta do??? Company.... I will expense
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Rank: Member Joined: 6/14/2010 Posts: 521 Location: Nairobi
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Jamani wrote:Check this out http://www.revenue.go.ke...ationPack-09-8-12.pdf1. For resident individuals, the annual tax rates (on total annual income including net rent income) are as follows; On the first Kshs. 121,968 .......................10% On the next Kshs. 114,912 ...................... 15% On the next Kshs. 114,912 .................... 20% On the next Kshs. 114,912 .....................25% On all income over Kshs. 466,704.........30% Note: The above scales are referred to as “graduated” The link is broken 
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Rank: Elder Joined: 11/7/2007 Posts: 2,182
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there is no other way of taxing corporations it's net income , @lietmach that's the correct way buddy LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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Rank: Elder Joined: 7/22/2009 Posts: 7,869
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VituVingiSana wrote:All those crying about the 30% tax on rental income... Perhaps, this means the cost of houses/construction is too high!
Land prices have gone crazy. A reduction in rental income should discourage Developers paying increasingly higher prices for raw land. After all the cost of raw land is passed on to the price of housing units.
A reduction in loan uptake [borrowers] should force lenders to reduce rates OR place cash in T-Bonds.
A reduction in construction should force vendors of cement, furniture, tiles, etc to reduce their profit margins. Totally misadviced @vvs. Do you know the level of shortage in housing in Kenya??? The supply of new units cannot keep up with the demand! Not even close. The government is hopeless when it comes to provision of decent housing. And you are talking about discouraging private investors who are trying to bridge the gap between demand and supply?? Let's get serious or Kenya might be one huge slum. Is it Senegal where people live in old vans because despite having "middle class jobs" they can't afford to rent a house? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 11/17/2012 Posts: 1,461 Location: Ngong Forest
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Suppose the tenant[s] vacate house or worse default on rent,what happens?
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Rank: Elder Joined: 7/22/2009 Posts: 7,869
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Rank: Chief Joined: 1/3/2007 Posts: 18,361 Location: Nairobi
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kizee1 wrote:VituVingiSana wrote:All those crying about the 30% tax on rental income... Perhaps, this means the cost of houses/construction is too high!
Land prices have gone crazy. A reduction in rental income should discourage Developers paying increasingly higher prices for raw land. After all the cost of raw land is passed on to the price of housing units.
A reduction in loan uptake [borrowers] should force lenders to reduce rates OR place cash in T-Bonds.
A reduction in construction should force vendors of cement, furniture, tiles, etc to reduce their profit margins. basically discourage all players from investing in the sector no? Reduce the margins/spreads not discourage ALL players from investing in the sector. Folks tell me they make 100% annually on property developments! How is that sustainable? KRA needs a cut of the action. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,361 Location: Nairobi
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MaichBlack wrote:VituVingiSana wrote:All those crying about the 30% tax on rental income... Perhaps, this means the cost of houses/construction is too high!
Land prices have gone crazy. A reduction in rental income should discourage Developers paying increasingly higher prices for raw land. After all the cost of raw land is passed on to the price of housing units.
A reduction in loan uptake [borrowers] should force lenders to reduce rates OR place cash in T-Bonds.
A reduction in construction should force vendors of cement, furniture, tiles, etc to reduce their profit margins. Totally misadviced @vvs. Do you know the level of shortage in housing in Kenya??? The supply of new units cannot keep up with the demand! Not even close. The government is hopeless when it comes to provision of decent housing. And you are talking about discouraging private investors who are trying to bridge the gap between demand and supply?? Let's get serious or Kenya might be one huge slum. Is it Senegal where people live in old vans because despite having "middle class jobs" they can't afford to rent a house? OK. If the demand for housing continues ourtstripping supply than what is the problem for suppliers i.e. developers & landlords? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 10/9/2008 Posts: 5,389
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I am in formal employment and I pay 30% tax on my income. So what is wrong with other citizens, including landlords, paying 30% tax on their income? Those in formal employment have borne the country's tax burden alone for so long. Sad that we have been having a system where I pay tax on my meagre income while someone pocketing eg 600k per month from a block of flats in Nairobi pays zero tax on income.
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How Government intends to kill the construction industry
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