Every Kenyan citizen earning from employment, business, rental income, or others sources is required to file KRA returns at the prescribed time. Generally, taxation is necessary for all countries, including Kenya, because it is the primary way for the government to earn revenue. Filling Kenya Revenue Authority (KRA) tax returns is also essential for citizens. Failure to file KRA returns can lead to penalization.
People file different returns depending on their income-generating activities. Filling returns is through iTax, a web-based system for updating tax detail. You should make a one-time registration before filing. You will also be login with a pin and password in addition to other security features like a security stamp challenge.
You can file annual returns under the categories below.
How to File Individual Income Tax Returns for KRA
Declare your income, file the returns and make a tax payment using the steps below:
- Visit https://itax.kra.go.ke/KRA-Portal. It is the official iTax portal.
- Enter your Pin/User ID password and solve a security stamp challenge and log in to iTax profile
- Go to a navigation menu, returns, and click File Return.
- Download and fill in the required details on the return form. (ODS or Excel)
- Fill in the required information on the online form
- Upload the form after filling
- Agree with Terms and Conditions
- Click submit
- iTax generates a receipt and an acknowledgment message.
How to file nil Returns on Kenya Revenue Authority (KRA) portal
Kenya’s tax regime is a self-assessment model whereby individuals declare their income. You can file KRA nil returns when you are below the taxable income, so you did not pay any taxes. It is a reserve for the unemployed and without another source of income like students.
Below is the process of filing nil returns.
- Go to https://itax.kra.go.ke/KRA-Portal.
- Log in to iTax profile. Enter pin/User ID, your password and solve a security
- Find returns on the navigation menu and click File Nil Return
- The nil returns page has a tax obligation tab for you to choose income tax options from the drop-down menu, compromising resident individual and non-resident individual and rent income. Click the appropriate to get a nil e-return/PAYE form with a corresponding period.
- Click on submit after confirming that the details are correct or press the back button when you want to correct something.
The iTax system will display a successive submission message, and you will receive an acknowledgment receipt that you can download for future records.
How to file rental income for tax in Kenya
Landlords and ladies with a rental income of KSh 144,000 and Ksh 10Million per annum pay 10% of gross monthly rent. One should file monthly but can pay the tax monthly, quarterly, or annually.
Follow these steps to file your rental income.
- Log in to the iTax portal by f entering your pin and password.
- Hover the cursor on the returns tab and click file return from the drop-down menu
- Select Income Tax Rental and click next
- Select the tax period, although it is filled automatically if you have been filing monthly. Select the month if you are filing for the first time. The return should be original unless you want to amend the previous.
- Click proceed
- Input all your properties and total rent income.
- iTax calculates and displays the tax due
- Click on submit and click
- Generate the payment slip
- Note that you can click on the payment link if you want to pay through electronic means
How to file VAT returns in Kenya
Value Added Tax (VAT) is a charge on taxable goods or services you provide in Kenya. It also applies to the importation of goods and services with the tax bracket. VAT is 16%.
File VAT by following the steps below.
- Visit the iTax portal and click the ‘forms’ option to download VAT return excel format. Excel version on the downloadable sheet is more convenient than Open Document Format that sometimes fails to function.
- Fill the downloaded spreadsheet accurately. Fill in all the tabs and make any necessary collections.
- Create a zip file and save it in a folder for uploading.
- Upload the zip file by login into https://itax.kra.go.ke/KRA-Portal/ to access the company profile
- Click ‘e-Returns from the navigation menu or select ‘returns’ and click File Returns.
- Select the type, type taxpayer’s pin, and select ‘VAT’ as the tax obligation. Click next.
- Fill in all details like type of return, entity, branch name, and period of return on the return filing page. The system allows for monthly returns one at a time.
- Click upload and select the generated zip file
- Tick the checkbox to show you agree with terms and conditions
- Click submit button to upload the VAT returns in Zip file and click OK
- If the file has no errors, the iTax system will display a message showing that the ‘return submitted successfully’ and follow up with an acknowledgment number. Use the available link to download a returns receipt.
Filing Pay as You Earn (PAYE) Returns
- PAYE is a tax that employers deduct from employees’ salaries or wages for submission to KRA.
- Here is the way to file PAYE returns online.
- Log in to the iTax portal by entering the KRA pin, password, and Security Stamp.
- Click on file returns under the returns section, select income tax, and PAYE option.
- Click on the returns tab and ITR for employment income.
- Fill the sections with a red asterisk on section A
- Go section T and fill sections 1.1 and 2.5 as they are the necessary parts
- Fill Total Employment Income in Section F
- Click on section M tab. Check the taxable salary, tax on taxable salary, and information on tax deducted salary as reflected on P9.
- Fill any tax paid in advance in Section Q. Click on submit after filling this section.
How to File KRA Returns for a Company
KRA requires companies to apply for a personal identification number. A firm is enrolled in the tax system upon registration. You file a return of a company using the following procedure.
- Log in to iTax portal using the company credentials
- Click submit for the iTax profile page of the company to open on the browser
- Look for the returns drop-down list and click on file returns. It directs you to the income tax company form. Download an excel workbook for the company.
- Fill in all the necessary details according to the company financial statements on the extracted workbook.
- Verify accuracy, click on validate and upload the filled form on the iTax platform.
- The platform generates an e return receipt on a successful submission together with an acknowledgment number.
On filing KRA Returns, an e-return receipt will be generated with the message return submitted successfully along with the acknowledgment number.
It is wise to file KRA returns early to avoid the frustration of finding iTax unavailable because many people are trying to log in simultaneously in the last few days. KRA sensitizes the public frequently about any updates or alterations to the tax filing procedure.