Kenya Revenue Authority (KRA) is in charge of the collection of taxes in Kenya. The government collects taxes to help deliver services like health and infrastructure. Therefore, it is a responsibility of every Kenyan to pay their taxes. Tax evasion is punishable by law and it deprives off the government money to provide essential services.
Therefore, if you are looking how you can file tax returns in Kenya, this article will provide you with the details.
How to File Nil Returns
Nil returns are filed by unemployed people or those whose income falls below the taxable income bracket. Anyone with a KRA pin is required to file a nil return and failure to do so attracts a penalty of Ksh 10,000. To file nil returns, you need a KRA PIN and an iTax account.
Follow these simple steps to file nil returns on iTax.
- Login to iTax
- Enter your KRA PIN and User ID and then click Continue
- Enter your password and answer the security stamp question. You can reset your password by clicking reset password in case you cannot remember it.
- One you have logged in, you will be redirected to another page. Click “Returns” and from the drop down arrow, select "File Nil Returns".
- Then fill in this information:
- Type: Self
- Taxpayer Pin: Your KRA PIN
- Tax Obligation: Income tax resident
- Then click next
- You will be redirected to a new page where you should enter your personal identification details. Select the return period for which you are filing returns for.
- Then click the Submit button
How to File Company Tax Returns
It is a legal requirement for every company in Kenya to file tax returns with the registrar of companies. Since KRA introduced the iTax system, it is easy for companies to file their annual returns online. To file company tax returns online, you need to create an eCitizen account. Then link your company to the eCitizen account by clicking “Get service now” and then provide details about your company.
You will also need to provide details about the company directors and secretary, their postal and physical addresses. The registry will then verify the information you provided for approval. It takes 1-4 days to approve the information. Once it is approved, you can go ahead to file annual returns. Follow these simple steps:
- Click “Maintain company” tab and select Annual returns
- Select the last year your filed annual returns
- Save the details and then click continue
- Download the annual return form
- Have the company secretary sign the annual return form
- Upload the duly signed annual return form
- Select the method of payment. Mpesa is the most preferred method. The amount to pay will be generated by the iTax depending on whether you have penalties.
- A receipt will be generated once you have paid. You can download the receipt
Requirements for Filing Tax Returns for a Limited Company
To file tax returns for a limited company in Kenya, you need to provide the following details:
- Balance sheet duplicates certified by company director and secretary
- A certificate signed by the company director and secretary that the company has never asked members of the public to subscribe to its shares
KRA Tax Returns Deadline
The deadline for filing KRA tax returns is usually 30th June of every year. Failure to file your returns on time attracts a Ksh 10,000 fine. Therefore, make sure to file your returns on time.
Types of Taxes in Kenya
There are different types of taxes levied and will look at each one of them.
- Pay As You Earn (PAYE). It is levied on income taxes.
- Corporation Tax. It is levied on companies at a rate of 30% for resident companies and 37.5% for non-resident companies.
- Rental income tax. It is levied on rental properties at a rate of 10% of the gross rental income.
- Value Added Tax. It is levied on taxable goods and services at a rate of 16%. Petroleum products are taxed at a rate of 8% except Liquefied Petroleum Gas (LPG).
Summary of How to File Tax Returns in Kenya
It is mandatory for every Kenyan resident under the taxable income bracket and companies to pay taxes. Failure to pay taxes attracts hefty fines and can land you in jail. People below the taxable income, students and unemployed people need to file nil returns. Make sure to do so before 30th June of every year.