Filing a tax return in Kenya is a legal requirement for individuals and businesses. Whether you’re employed, self-employed, or running a business, complying with the Kenya Revenue Authority (KRA) is crucial to avoid penalties and ensure smooth financial operations.
Here is a step-by-step guide on how to file your tax returns in Kenya.
Step 1: Register for a KRA PIN
Before filing a tax return, you must have a Personal Identification Number (PIN) from the Kenya Revenue Authority (KRA). The KRA PIN is mandatory for tax purposes and accessing certain government services.
How to Get a KRA PIN:
- Visit the KRA iTax portal: https://itax.kra.go.ke.
- Click on New PIN Registration.
- Fill out the required details, including your national ID number and email address.
- Submit the application and await the confirmation email with your PIN.
Step 2: Gather Necessary Documents
To file a tax return, you will need specific documents based on your employment status:
- For employed individuals:
- P9 form from your employer (this contains your annual income and taxes deducted).
- For self-employed individuals:
- Detailed records of your income and expenses for the year.
- For businesses:
- Financial statements, including income, expenses, and balance sheet.
Ensure these documents are accurate to avoid errors during the filing process.
Step 3: Log into the iTax Portal
Once you have all necessary documents, log into your iTax account:
- Visit the KRA iTax portal: https://itax.kra.go.ke.
- Enter your KRA PIN and password, then solve the CAPTCHA to access your account.
- If it’s your first time logging in, you may be required to update your password or contact details.
Step 4: File Your Tax Return
After logging in, follow these steps to file your tax return:
For Employed Individuals (PAYE Return):
- Under the Returns tab, click on File Return.
- Select Income Tax – Resident Individual.
- Download the Income Tax Return Form (Excel sheet) and fill in your income details, using your P9 form as a guide.
- Upload the completed form back to the iTax portal and submit.
For Self-Employed Individuals or Businesses:
- Go to the Returns tab and select Income Tax Return for individuals or businesses.
- Download the relevant form (either the individual or business version).
- Fill out the form, inputting details of your income, expenses, and any other tax-deductible items.
- Submit the filled form on the iTax portal.
Step 5: Confirm Submission
Once you’ve submitted the return, a confirmation receipt will be generated on the portal, and you will also receive an email from KRA. Ensure to download or print the acknowledgment receipt for your records.
Step 6: Pay Tax Due (If Applicable)
If your return shows that you owe taxes, follow these steps to pay:
- Generate a Payment Slip via the iTax portal under the Payments tab.
- Select the appropriate tax head (Income Tax, VAT, etc.) and the tax period.
- After generating the payment slip, visit any KRA-approved bank to complete the payment or pay via mobile money services such as M-Pesa.
Step 7: Keep Records
It is essential to maintain copies of all your tax returns, payment receipts, and supporting documents for future reference. These records may be needed in case of a tax audit or future tax filings.
Common Mistakes to Avoid When Filing Tax Returns
- Filing Late: Late filing attracts penalties of KES 2,000 or 5% of the tax due, whichever is higher. The filing deadline for individuals is June 30 each year.
- Incomplete Information: Ensure all details, such as income, tax deductions, and personal information, are correctly filled out.
- Failure to Pay Taxes: If you owe taxes, ensure timely payment to avoid interest and penalties.
Conclusion
Filing a tax return in Kenya is a straightforward process if you have the right documents and understand the steps. Ensure you complete your filing on time to avoid penalties and keep your financial records organized. By using the KRA iTax portal, the process becomes efficient, allowing you to comply with tax laws and focus on your personal or business goals.
By staying compliant, you contribute to Kenya’s development and enjoy the benefits of being tax-compliant, such as easier access to loans and other financial services.
