Wednesday, July 24, 2024

Airbnb to share transactions backed with MPESA records with KRA to nail tax cheats


AirBnB place photo in Kenya

The Kenya Revenue Authority (KRA) has recently requested information regarding transactions made by Airbnb hosts in the country. 

The taxman is seeking data on all transactions that occurred on the short-term rental platform between January 1, 2021, and December 31, 2022. 

This data will help identify Kenyan residents who rented out their properties on Airbnb and how much they earned during the period.

Airbnb, an Irish company, has confirmed that it has received an official request from its authorities over the matter and is legally obliged to share the requested information.

The Irish Tax Authority (Irish Revenue) has been requested by the KRA to share certain information on Kenya hosts, which Airbnb will provide.

Airbnb has become a game-changer in the travel industry, giving traditional hotels stiff competition. Despite its success, Airbnb hosts in Kenya are expected to comply with local tax laws. 

Watamu airbnb hotel photo

According to the statement, affected users whose data will be shared were notified to await a message once their details are sent.

Irish Revenue will be communicating with each Kenyan user whose data is being shared, informing them that their data is being sent to the KRA under an exchange of information request. 

As Airbnb is a profitable business in Kenya, hosts can make thousands of shillings during periods of high demand, such as during festivals. The average rental rate for most Airbnb properties in Kenya is between Ksh2,500 to Ksh5,000 per night, with certain houses charging up to Ksh40,000. 

It is not yet clear whether the taxman will take any action against those who failed to remit their taxes during the specified period. 

Nonetheless, the statement reminds those who earned income from Airbnb rentals to note that their earnings are subject to Kenyan tax regulations. 


Airbnb application

Hosts are, therefore, legally obligated to accurately report their earnings on Airbnb to the KRA if they need to file a tax return.