This is tax payable by resident persons (individual or company) on rental income earned for the use or occupation of a residential property where the rent income is between Kshs. 144,000 (Kshs. 12,000 per month) and Kshs. 10 million per annum.

1. MONTHLY RENTAL INCOME

2. Introduction
Finance Act 2015 approved implementation of a simplified tax regime on rental income.
This tax regime is the residential rental income tax also known as monthly rental income (MRI). It came into effect on
1st Jan 2016.

3. Definition
This is tax payable by resident persons (individual or company) on rental income earned for the use or occupation of a
residential property where the rent income is between Kshs. 144,000 (Kshs. 12,000 per month) and Kshs. 10 million
per annum.

4. MRI Tax Rate
The rate of tax is 10% on gross rent received.
It is paid on monthly basis.

5. MRI Contd’
No expenses, losses and personal relief shall be allowed.
MRI is a final tax.

6. MRI Tax Point
Tax point is when landlords receive rent from their tenants - monthly, quarterly, semi annually or annually.
Therefore, those receiving rent quarterly, semi annually or annually will be expected to pay when they receive rent and
file nil returns during the intervening period.

7. How To Calculate MRI
Rental income Received (gross) 25,000
MRI tax @ 10% of gross (10/100 x 25000) 2,500
Total tax = 2,500

8. Filing MRI
Rental Income is filed on or before the 20th of the following month. For example, rent received in January is declared
and tax paid on or before 20th February.
Complete a monthly tax return online via iTax by declaring the gross rent and tax payable will be computed
automatically at a rate of 10%.

9. Paying MRI
After filing the return online, one is required to generate a payment slip via iTax which will be presented at any of the
KRA appointed banks to pay the tax due.

10. MRI Exemptions
The simplified tax does not apply to:
• Non-residents
• Landlords earning more than Kshs. 10M p.a

11. MRI Exemptions Contd’
• Taxpayers who wish to remain in current tax regime on rental income may elect to do so by writing to
Commissioner.