In Kenya, it doesn’t matter whether you are a student, unemployed, or someone who works for yourself because every adult is expected to file their KRA tax or Nil returns as the case might be. Once you are 18 and have acquired your KRA PIN number, it becomes mandatory for one to file these returns so as to avoid getting into trouble with the taxman.
In the country, filing tax returns has become imperative for registered taxpayers who could be either a resident individual, corporation, partnership, or indirect tax. If you do not have any income that will require you to pay tax, the law still makes it mandatory for you to file for the Nil Returns.
Filing Your KRA Tax Returns
Filing your KRA tax returns has been made very easy using the iTax online platform. Here are the easy steps to follow:
- Visit the iTax filing portal using this link; https://itax.kra.go.ke/KRA-Portal/
- Next, make use of your PIN and password to log into the iTAX portal
- Now, on the navigation menu, you can either select ‘e-Returns’ or select ‘Returns’ and then click on ‘File Returns’.
- Select the Type you are filing for
- Enter your taxpayer’s PIN and select the Tax obligation applicable to you and then click Next.
- You will be expected to enter Return Period and then to the question; ‘Do you have employment income?’, answer Yes before clicking Next
- Now, fill in the Returns and answer the basic questions as required and as appropriately as you can, and then click on Next.
- Go to Section F, details of employment income, and confirm the name of your employer and also the PIN. Also, enter your Gross Pay and other allowances as per your P9 form.
- The next thing you want to do is to confirm the details of PAYE deducted. Go to Sheet M, confirm Employer details, Taxable salary, chargeable pay, Tax payable on taxable salary, and also PAYE deducted. Details can be modified as per your P9.
- After this, you will want to head to Section Q and capture a payment if any, made prior to the filing of the return.
- Head to Section T, Tax Computation, Enter defined/pension contribution amount (as per your P9 actual contribution by an employee), and personal relief.
- With all the processes followed and rechecked, click the Submit button and download the E-return acknowledgment receipt.
How Does One File For KRA Returns When They Are Not Employed?
For individuals who are not employed, you will still be expected to file your KRA tax returns but this time around, you will make use of the Nil tax return. There are those who file the Nil income even when they are employed in order to avoid paying tax or because they are unable to file on time. Nonetheless, that is considered a crime that can land one behind bars or get fined.
It is important to file for the Nil returns even if you are unemployed as failure to do so would lead to a fine of Ksh20,000.
Steps to Follow When Filing Your Nil Income Tax Return
- Head to the visiting Tax portal or visit https://itax.kra.go.ke/KRA-Portal
- Log into your account by filling in your PIN in the appropriate space and hit the “Continue” button, followed by your password, and click “Login”.
- Update your professional menu
- Click on the ‘Returns’ menu and a drop-down menu will appear. From it, select the File Nil Returns option.
- Fill in the necessary information as regards Type (Self), Taxpayer Pin (Your Pin), and Tax Obligation (Income tax Resident). Click Next.
- Put in your return period From. This will get the Return Period To automatically populated.
- Now, click on the Submit button.
- Finally, download your receipt.
Note: There is also an app that you can download and use on your mobile device. Before you can use the app, however, you must have first registered and filled in your returns on the portal.
Failure To File Taxes Can Get One Into Trouble
Each year, one is expected to file tax returns before or by June 30th, failure of which can come with its consequence whether it is an individual or a company. Failure to file your tax returns can attract a penalty of KSh20,000 and KSh2,000 for companies and individuals respectively.
It is considered late payment once one is unable to pay before or by the last day of June. Even though the prices for penalty have been spelled out, you can also find yourself paying an extra 5% extra on your tax, depending on which is higher between the percentage and the stated penalty fee.
There are other penalties for different offenses that relate to tax filings. If you fail to pay the tax in general, there is a penalty of an additional tax equal to 5% of the normal tax or Ksh20,000. For other KRA PIN-related offenses, there is a penalty of Ksh2,000 per offense.
What Happens if You Haven’t Filed Taxes in 5 Years?
Failure to file your taxes for any period beyond the stated time is considered an offense that can attract either a fine, prison sentence, or both.
While five years is quite a long time for one not to file taxes, there is no available penalty for it that is clearly spelled. However, for each year, you may pay anything between Ksh2,000 and Ksh20,000 and in some cases, get a jail term.
It is important to note that since there is no specific penalty for this offense, it falls under offenses for which no specific penalty is provided. A general penalty of fine not exceeding Ksh500,000 or imprisonment for a period not exceeding three years or both is applicable.
Deadline To Remember When You File Your KRA Tax or Nil Returns
It is always very important to file your tax returns whether you are employed or unemployed but have your PIN. What is even more important is to ensure that one pays before the deadline as failure to do so will attract a fine.
As stated by the Kenya Revenue Authority (KRA), everyone is expected to complete and submit the KRA tax returns before the deadline which is usually 30th June. A fresh cycle starts at the start of a new year on January 1st, and from then until the end of June, you are expected to file your returns.
Various penalties, as mentioned, are set for defaulters including those who outrightly fail to submit or those who miss the deadline and it could either be in the form of a fine or prison sentence.