The Finance Bill 2023, if passed, will require landlords in Kenya to remit rental tax within 24 hours of receiving payment from their tenants. The proposed bill also mandates landlords to deduct the rental tax from their income and submit it to the Kenya Revenue Authority (KRA). The current tax returns submission deadline of the 20th of every month will be reduced to 24 hours, should the bill become law.

Landlords who earn between KSh 24,000 and KSh 1.25 million per month will have to file monthly returns declaring their gross income. The tax payable from rental earnings will be calculated at a rate of 10%.

The Finance Bill 2023 also proposes an increase in pay as you earn (PAYE) from 30% to 35% for employees earning up to KSh 500,000, with those earning KSh 600,000 and above paying at least KSh 5,000 as additional tax. Additionally, President William Ruto announced the introduction of the 3% National Housing Development Fund (NHDF), which includes a 3% salary cut on the employee’s monthly pay matched with a 3% contribution from the employer.

However, the proposed bill has met opposition, including from Raila Odinga, who criticized the proposed 316% tax increase on wigs and fake beards. If the Finance Bill 2023 becomes law, it is expected to raise more revenue to finance Kenya’s KSh 3.64 trillion budget for the fiscal year 2023/24 starting from July 1, 2023.