KRA Warns Landlords Charging Too Little Rent: Today’s Money News

The Kenya Revenue Authority (KRA) has warned some landlords who have recorded little or no increases to the rental income filed over the years. 

The Business Daily reported that it was in possession of the letters that a section of landlords received over failure to align their rental charges with market rates. 

KRA noted that it expected rental income and the reciprocating rental income tax, to grow in line with market trends. 

This, however, has not been the case - with some landlords reporting the same rental income tax over the years. The move is expected to see some tenants pay more rent as the landlords seek to register growth in their tax filings. 

Landlords currently pay 7.5% of their gross earnings as income tax. The amount affects all landlords whose annual rental income ranges between Ksh288,000 (Ksh 24,000 per month) and Ksh15 million (Ksh1.25 million per month. 

The development also comes in the wake of another directive from KRA requiring landlords to pay 1.5% of their gross income in the form of the housing levy. 

The taxman clarified that the housing levy would be 1.5% of all earnings - even for those who may be servicing loans or incurring losses due to high maintenance costs.  

Kenyans in Saudi Arabia Sent 150 Million Daily over the Past 3 Months

Kenyans working in Saudi Arabia sent home an average of Ksh150 million daily over the first three months of 2024. 

According to data from the Central Bank of Kenya, Kenyans working in Saudi Arabia sent Ksh13.48 billion between January and March 2024. This was a 14.29% growth from the same period last year when Ksh11.55 billion was remitted. 

The percentage growth reduced significantly as Saudi Arabia continues to face scrutiny over issues related to labour rights and the mistreatment of Kenyan workers working in its informal sector. 

Despite the growth recorded in 2024, Kenyans in the United Kingdom remitted more than their counterparts from Saudia Arabia - sending in Ksh14.95 billion (Ksh166 million per day) in the first quarter of 2024. 

The UK has now overtaken Saudi Arabia as the second-largest source of diaspora remittances. The US remains the leading source of foreign remittances with the Kenyan diaspora there wiring Ksh85.72 billion (about Ksh928 million per day) over the same period.

On average, Kenyans in the UK are sending [insert amount] per day, surpassing Saudi Arabia's contributions. This shift underscores the evolving patterns of remittance flows from different diaspora communities."

Safaricom's Profit Crosses 1 Billion Dollar Mark

Safaricom has become the first Kenyan company to surpass the one billion dollar mark in operating profit. 

Safaricom announced an operating profit of Ksh139.9 billion in the year ended March 31st, 2024, up from Ksh84.99 billion in 2023. 

Despite the growth in operating profit, the telco’s net profit fell to Ksh42.6 billion - a 23% drop from Ksh52.4 billion last year. 

This was the lowest net profit recorded over the past five years, attributable to expenses incurred in building Safaricom’s subsidiary in Ethiopia. 

Safaricom investors will earn dividends of Ksh1.23 per share, with a total of Ksh48.08 billion being paid out.