Kenyan Taxes

How to file for tax returns on KRA

KRA tax returns are imposed on individuals based on their income tax received from the services and employment section.

One of the most important obligations as a Kenyan citizen is to register and identify yourself with the Kenya Revenue Authorities system. Let's get into what filing returns are and what you need to know down below;

  • How does KRA work?
  • What is the importance of filing returns?
  • What are the benefits of filing returns?
  • How to file for an employment income Return
  • How to register for a PIN if you are a student
  • Nil returns and how to file them
  • Frequently asked questions(FAQs)
  • Conclusion

How does KRA work?

KRA is an authority that works with the Kenyan government to collect revenue imposed on its citizens to improve the country's economic development. They assess, manage and stand accountable for all payments as Kenyan law requires. 

What is the importance of filing returns?

It is important to file your taxes as required of you by the Kenyan law, and this is why;

  1. Filing a tax as a citizen helps the government to be able to come up with good economic developments that are helpful to us as a country.
  2. Filing returns means you are a law-abiding citizen following the government rules, which benefits all of us.
  3. Filing taxes returns enables individuals to keep track of their income revenue and put trust in the government by reporting to the KRA platform on taxes due payment.

What are the benefits of filing returns?

  1. It is helpful in cases whereby you want to request a loan for use. Most loan granters would want to know if you have been filing your taxes. 
  2. In employment, most companies want to know if you have registered with KRA for tax deductions made by employers to their employees.
  3. Filing returns come in handy when you want to claim for past losses. Maybe your business could have done better, and you experienced a loss. With proof that you've been consistently filing your returns without failure, you can claim an adjustment against this past loss.

How to file for an employment income Return

  1. Log in on the iTax portal and input your KRA PIN and password.
  2. Click on the return menu and select "file return."
  3. Under the tax obligation, click "income tax-resident individual," then click next.
  4. You will need to download the income tax resident excel form to your computer.
  5. Fill in the required details in the "basic information" section on the form, then click next.
  6. Proceed to section F, where you must provide information about your employment in rows (A3-G3).
  7. In section F, column H, input your gross income earned from January-March and April-December with your pension contributions as per the P9 form given to you by your employer.
  8. In section M, fill in your PAYE details as PER the P9 form for the whole year.
  9. Under the section "computation mortgage," input the interest paid for your mortgage between January-march and April-December.
  10. In section K," Home Ownership and Savings Plan," you can only fill in if you are a homeowner taxpayer(HOSP). You will be taxed based on received revenue from January-March and April-December.
  11. Section T," tax computation," input the total pension acquired in the year. Ensure the math blends well with what you've put in section F for January-March and April-December.
  12. Proceed by clicking the "validate "button and by uploading the file on the iTax portal.
  13. Go back to the return menu, click on file returns, select tax obligation as a resident individual, click next to upload the zipped downloaded file, then submit.
  14. You will receive an acknowledgment receipt you can download.

How to register for a PIN if you are a student

As a student, you may need a KRA PIN to open a bank account or for many other reasons that will push you to get registered. Here's how you can get yourself a PIN on the KRA portal;

  1. Search and log in to the iTax portal and click "New PIN Registration." 
  2. You will be required to select your mode of registration. In this case, if you are Kenyan, you will choose "resident Individual" and "online" forms, then click "next."
  3. You will be directed to fill in your information, whereby under "employees profession," you will select "student." 
  4. Under "subgroup," input your level of education and continue filling in your personal details with your email address included.
  5. You must verify your email to continue with the registration process. At the email prompt, click "okay" to continue. 
  6. Proceed by clicking on "send OTP"( One Time Password) sent to your email account. Copy the OTP and put it on the form you are filling out on the KRA portal. 
  7. Continue with the detail fill-in process, then click "next "to take you to the next page.
  8. Under "obligation details," you will tick on the "income tax resident," input the registration date and click "next."
  9. Under the "source of income" section, select "No" for employment, business, and rental incomes. Click "next."
  10. Under "agent details," skip to section E2 and fill in the" type of authorization" as partial and "type of obligation" as income tax resident.
  11. Answer the simple math query with a correct answer, then click" Submit" you will receive a KRA message and click okay.
  12. You will receive an acknowledgment that your application has been submitted successfully. 
  13. You can click to download the receipt of acknowledgment.

NOTE; To register, you must have an ID, phone number, and active email address to succeed.

Nil returns and how to file them

A nil return is a tax paid by individuals with no income source, and they have filed to inform KRA there is no amount of money paid for taxation.

Before filing for the return, ensure you have your KRA PIN, which will help identify yourself with the iTax system. You have to own this PIN since it will be like your identity all the time you need to get any governmental or KRA services, among many others.

Here's a guide on how you can file nil returns;

  1. Log in to the iTax portal and input your KRA PIN and password.

  1. Click on returns, whereby you will go with the option "File Nil Returns."

  1. Under "File Nil Return" on the taxpayer's obligation, select income tax resident if you are a Kenyan citizen, then click "Next."

  1. Input the return periods you want to file for, then "Submit." You can choose to download the receipt if your wish to.

Filing has been simplified with step by step instructions you can follow. For tutorials, here's a video you can watch that will guide you through the filing process.

Frequently asked questions(FAQs)

Who should file for KRA returns?

If you are 18 years old, possess an ID card, and have yet to think about registering with the KRA, that should be among your plans to avoid having issues with the government. You can obtain a KRA PIN by registering on the iTax portal

If you are employed or earning any other source of income, which could be from a business or services offered, you will be required to register and file for returns.

When should returns be filed?

As a taxpayer, you are supposed to file your returns between the 1st of January and before the 30th of June every year. Consider filing for them early to avoid a last-minute rush because "mapema ndio best," as all Kenyans would say.

What happens to you if you don't file your returns?

Failure to file for KRA returns will have you paying extras. This measure is implemented on everyone who fails to file and will attract a certain penalty percentage. It does not matter if you are filing for a NIL Return and have no source of income, you will still pay. 

Penalties charges can be 5% of the tax due and 1% charged for late payments each month you have unpaid taxes until you complete the balance. You can also pay an amount of Ksh 2000 to the KRA in cash if you choose to.

Can I file my returns using a phone?

Yes, you can. Any device, whether a laptop or a smartphone, can be used to sign in and file for returns on the KRA portal, provided they are connected to good internet services.

Who should file for nil return?

A nil return is a tax filed by individuals who are unemployed and are of age 18 years and above.  Also, taxpayers whose sources of income do not generate money on the expected date to-file period can file Nil returns.  

Conclusion

Filing for tax returns is essential for every individual to consider. There are so many goods that these filings will do to a country, and putting them in place helps us grow economically.

NOTE: Check our our short YouTube video that talks about the basic knowledge you need to know in-order to file your taxes.

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