The Kenya Revenue Authority (KRA) has released draft tax regulations that could change how landlords and employers are taxed in Kenya in a move aimed at increasing compliance.
In a notice dated April 29, 2026, KRA announced amendments to the Draft Income Tax (Residential Rental Income Tax) Regulations, 2026, and the Draft Income Tax (Set Off Tax Rebate for Graduate Apprenticeships) Regulations of 2026.
While the residential rental income tax seeks to improve revenue collection, the rebate for graduate apprenticeship incentivises employers to boost youth employment.
Despite the existence of the residential Rental Income Tax framework, KRA now intends to streamline its tax crackdown and seal loopholes that have allowed widespread under-declaration of rental income.
Under the current system, landlords earning between Ksh288,000 and Ksh15 million annually are required to pay a monthly residential rental income tax at a rate of 7.5 per cent on gross rent.
However, the amendments are expected to introduce stricter enforcement, including enhanced digital monitoring of rental income streams and improved data matching.
On the other hand, the graduate apprenticeships regulation introduces a tax relief mechanism for employers to encourage them to hire and train fresh graduates.
It works by allowing employers to offset part of their tax obligations that are payable to KRA against the costs incurred in training the graduates.
The move is part of a broader government strategy to address youth unemployment by incentivising the private sector to absorb graduates for training and mentorship programmes.
Following the announcement, KRA urged Kenyans to express their input regarding the two tax categories, with the deadline for comments and reservations set for May 25, 2026.
“Your voice matters! We want to hear from you before finalising the new Residential Rental Income Tax Regulations and the Graduate Apprenticeship Tax Rebate rules,” KRA announced.
Kenyans who want to comment on the draft regulations were urged to do so through KRA’s dedicated platform: stakeholder.engagements@kra.go.ke.-Kenyans.co.ke.
