The Kenya Revenue Authority (KRA) has trained its eyes on Airbnb owners, asking the businesses to provide data on their transactions for the period of 1st January 2021 to 31st December 2022.
This move by the revenue authority is meant to identify the earnings of the Airbnb hosts for the mentioned period.
KRA sent the notice to Airbnb Ireland UC who serves as the data controller for all Airbnb users in Kenya.
“We have been required by the Kenya Revenue Authority (KRA) to provide a limited amount of data about historical transactions that took place on the Airbnb platform during the period from 1 January 2021 to 31 December 2022 to them.
This data will identify hosts and details of their earnings on Airbnb,” the statement read in part.
Additionally, the statement clarified that KRA’s request sought exchange of information with the Irish Tax Authority (Irish Revenue).
This exchange of information seeks to ascertain information on Kenyan Airbnb hosts.
Consequently, the statement clarified that the Irish Revenue has already formally asked Airbnb Ireland UC to share this information and therefore, the hosting company noted that it was legally obliged to do so.
Further, the statement went ahead to forewarn the hosts, letting them know to anticipate communication from the Irish Revenue Authority.
“Irish Revenue will now be communicating to each Kenyan user, whose data is being shared, that their data is being sent to KRA under an exchange of information request,” the statement cited.
Notably, KRA did not respond to queries on the verification of the statement.
Also Read: KRA Issues Directive on Goods Intercepted at JKIA
KRA on taxing Airbnb’s earnings
Notably, the statement noted to the hosts of the booking company that their earnings were subject to Kenyan tax regulations.
“If you need to file a tax return, remember that you have a legal obligation to accurately report your earnings on Airbnb to the Kenya Revenue Authority (KRA),” the statement disclosed.
This request from KRA came at a time when the revenue authority has been eyeing collection of taxes from digital platforms.
Notably, in January 2021, the Digital Service Tax came into effect.
It outlines the framework for tax collection in digital marketplaces. Under this legislation, all participants in digital marketplaces are obligated to remit 1.5 percent of their gross transaction value.
KRA’s efforts towards Airbnb tax compliance
Furthermore, in October 2023, it was announced that over 35,000 of Airbnb’s operators were flagged for failing to pay the tourism levy.
Also Read: Affordable Options When Airbnb Gets Expensive
Following the revelation, the Tourism Fund, put Airbnbs owners in Kenya on notice.
On this, the fund alongside other regulatory authorities had raised the alarm on the amount of revenue being lost due to untaxed Airbnb operations.
Notably, in recent times, more Kenyans have been opting for luxurious Airbnb’s than traditional hotels for accommodation.
KRA has put in place measures to widen its tax bracket and net tax cheats.
