Frequently Asked Questions About Filing KRA Tax Returns

Every Kenyan with an active KRA PIN should use their iTax Accounts to file KRA returns ahead of the deadline which for this year is June 30, 2022.

Submitting KRA returns and paying any taxes owed to the Kenya Revenue Authority (KRA) is part of a commitment to nation-building since the money collected from taxes forms a huge part of the national budget

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As we get to the home stretch of the KRA Returns Filing Season, many of you might have various questions concerning filing KRA Returns. As a result, this article will answer most if not all of your questions.

Let's get started with FAQs on filing NIL returns.

1. FAQs on KRA Nil Returns

What is KRA Nil Returns?

Taxpayers with an active KRA PIN but no source of income file KRA Nil Returns as their type of return. This group is also known as the Unemployed. Nil returns are also filed by university or college students who have KRA PIN numbers but are still enrolled.

What do I require in order to submit KRA Nil Returns?

You must have your KRA PIN number and iTax password in order to file KRA Nil Returns. 

How can I file my KRA Nil Returns? 

If you're not sure how to file nil returns, see our in-depth guide on how to File KRA Nil Returns in 2022.

When should I submit my KRA Nil Returns?

KRA Nil Returns are submitted from the start of the year until the last day of June. So you have a timeframe of 6 months to file your KRA Nil Returns, from January 1 through June 30.

Is there an extension for filing KRA Nil Returns?

The deadline for filing KRA Nil Returns is often NOT extended.

What happens if I don't file my KRA Nil Returns?

Failure to file your KRA Nil Returns before the June 30 deadline will result in a Ksh2,000 penalty being levied against you. To avoid being fined by KRA, it is best to file your Nil Returns now.

Do you need to file your KRA Nil Returns if you registered for a KRA PIN this year?

Individual income tax returns are due on December 31st, every year. As a result, if you applied for and obtained your KRA Number and KRA PIN Certificate this year you will begin filing your returns the next year.

2. FAQs on Employment Returns

What is KRA Employment Returns?

This type of KRA Return is filed by employed taxpayers. If you are employed, you file income tax returns based on the PAYE withheld at the time of employment.

How do I file my Employment Tax Returns?

To file your employment returns, you must have your KRA PIN number, iTax password, and P9 Form see our in-depth guide on how to file KRA tax returns in 2022.

The total income received in a year may include the following, depending on how the employer has organised the P9 Form: basic pay, allowances and perks, gross salary, pension contribution, PAYE charged, and personal relief entitled.

I worked at two different companies in a year. How do I file my Employment Returns?

If you worked for two separate employers in the same year, you will need both P9 Forms to file your taxes. You will record information about the two companies on the Returns Excel Sheet.

What Is the Meaning of Employment Returns Gross Pay And Pension Contribution?

Your gross pay consists of your basic salary plus any additional taxable benefits and allowances you get as part of your work. 

Monthly payments of up to Ksh20,000 (Ksh240,000 per annum) can be made to a defined contribution fund, such as the National Social Security Fund (NSSF), an individual retirement account, or a registered pension fund. However, the deductible amount is limited to the lesser of 30% of your basic (pensionable) income.

What does Employment Tax Relief Mean?

As a resident individual, you are entitled to personal relief, which is a tax break that reduces the amount of tax owed. 

The yearly rate of personal relief is now Ksh16,896 as of January 1st, 2018.

If you have a life, health, or education insurance policy, you are entitled to insurance relief of 15% of the premiums paid for yourself, your spouse, or your children. It must not, however, exceed Ksh60,000 yearly.

Can I correct a mistake after I've filed my return?

Yes. You can do so by filing an amended return.

When should I File my Employment Tax Returns?

If you are employed, you must file your returns between January 1 and June 30 of the current year, exactly as those who file KRA Nil Returns. As a result, you have six months to file your employment returns.

What happens if I don't file my employment tax returns?

If your employment returns are not submitted by the deadline of June 30, you will be fined Ksh2,000 or 5% of the tax due for a late submission.

What is a Tax Refund?

A tax refund is reimbursement of extra tax that was paid over a specific time period.

What is Tax Evasion?

Tax evasion is an unlawful practice where an organisation or person knowingly avoids or fails to pay taxes. Tax evasion in Kenya can take the form of either an unlawful underpayment of taxes or illegal nonpayment. 

What is Tax Avoidance?

This is the use of legal strategies to alter a person's financial condition in order to reduce the amount of income tax owed is known.