Filing KRA tax returns can be a challenging task for many individuals and businesses in Kenya. It’s crucial to understand the various types of taxes, their deadlines, and the consequences of late filing to avoid penalties and interest. This guide aims to help you stay informed and file your tax returns on time.

Who Needs to File Tax Returns?

In Kenya, every individual or entity with a Personal Identification Number (KRA PIN) issued by the Kenya Revenue Authority (KRA) is required to file tax returns. The KRA provides an online portal (iTax) for filing returns, making the process quick and straightforward. However, failure to file on time results in penalties.

Penalties and Interests for Late Filing :

Individual Tax Returns

• Penalty: Kshs. 2,000 or 5% of the tax due, whichever is higher.
• Deadline: June 30th of every year.

Income Tax (Company or Partnership Returns)

• Late Filing: 5% of the tax due or Kshs. 20,000 (whichever is higher).
• Late Payment (Non-Individuals): 5% of the tax due, plus 1% interest per month.
• Deadline: June 30th of every year.

Pay-As-You-Earn (PAYE)

• Late Filing: 25% of the tax due or Kshs. 10,000 (whichever is higher).
• Late Payment: 5% of the tax due, plus an interest rate of 1% per month.
• Deadline: 9th of every month.

Value Added Tax (VAT) and Excise Duty

• Late Filing: 5% of the tax due or Kshs. 10,000 (whichever is higher).
• Late Payment: 5% of the tax due, with an additional 1% interest per month.
• Deadline: 20th of every month.

Withholding Tax

• Late Filing: 5% of the tax due, or Kshs. 20,000 (whichever is higher).
• Late Payment: 5% of the tax due.
• Failure to Deduct or Remit: 10% of the amount due, up to a maximum of Kshs. 1 million.
• Deadline: 20th of every month.

Monthly Rental Income (MRI) Tax Returns

• Late Filing: Kshs. 2,000 or 5% of the tax due (whichever is higher) for individuals, and Kshs. 20,000 or 5% of the tax due for non-individuals.
• Late Payment: Penalty of 5% of the tax due and a monthly interest rate of 1%.
• Deadline: 20th of every month.

Turnover Tax (TOT)

• Late Filing: Monthly fine of Kshs. 1,000.
• Late Payment: 5% penalty and 1% interest on the tax due, respectively.
• Deadline: 20th of every month.

Nil Returns

• Requirement: Must be filed by individuals or companies in Kenya if they have not made any sales during the month or year.