How to File Tax Returns in Kenya?

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Do you dread filing your taxes? Perhaps you feel overwhelmed and do not know where to start. 

If you have negative feelings toward filling your taxes, this article is going to guide you step by step on how to file your tax returns.

To begin with, did you know you do not need to go to the KRA offices to file your returns? All you have to do is open the KRA website, wherever you are, and log in to the iTax portal.

How to file Income Tax Employment Income Only

1) Go to iTax

 Open your browser, and go to https://itax.kra.go.ke/KRA-Portal/

2) Login

Key in your KRA pin and click continue. Enter your password and security stamp (which is the answer to the arithmetic sum), and then click log in

3) Go to return menu 

Then select ITR for employment income

4) Enter return period

Select ‘Yes’ to the question Do you have employment income? Then click next.

5) Fill in the return information

Answer the questions under basic information accordingly, and then click next.

6) Confirm details of employment income

Go to Section F with details of employment income, and confirm the name, PIN of the employer, Gross Pay, and other allowances as indicated on your P9 form.

7) Confirm details of PAYE deducted

Go to sheet M and confirm employer details, taxable salary, chargeable pay, tax payable on taxable salary, and PAYE deducted. These details can be modified according to your P9.

8) Enter details of income tax paid in advance

Go to Section Q, and capture a payment if any made before the filing of the return.

9) Tax Computation

Go to Section T, Tax Computation, enter defined/pension contribution amount (as per your P9 actual contribution by the employee), and personal relief. Click submit and then download the E-return acknowledgment receipt.

How to file KRA PAYE returns online 

1. Go to your browser and log on to https://itax.kra.go.ke/KRA-Portal/ 

2. Key in your KRA PIN and click Continue. Then enter your password and security stamp (which is the answer to arithmetic sum). Thereafter, click log in.

3. Then go to the returns section, and click on file returns. Then select income Tax, and choose the PAYE option.

4. Go on and click on the returns tabs, and then the final item ITR for employment income.

5. Fill out the sections marked with a red asterisk in Section A.

6. Then go to section T. The two sections 1.1 and 2.5 are the only necessary bits to fill out.

7. After filling section T, go on to Section F and fill in your Total Employment Income.

8. Once you are done click on the section M tab, check that taxable salary, tax payable on taxable salary, and tax deducted salary are in line with the information on P9.

9. Then move to Section Q, and fill in the tax paid in advance. Do this only if it is applicable, and it is the last section of filling in your return. When you are through click submit.

10. If you have done everything correctly, a “return slip generated’ tab will appear. You can then click on “download returns slip” to have your slip.

How to File a Nil Returns on iTax

A nil return is made when you have no taxable income. Here are the steps you need to follow to file a nil return:

1) Go to the iTax portal on https://itax.kra.go.ke/KRA-Portal/

2) Enter your pin and click continue. Then enter your password

3) If you cannot remember your password click on Forgot password/Unlock account, and security stamp (answer to arithmetic).Then click submit, and the password will be sent to your registered email address.

4) Login and update professional details, and go to the Returns menu and click file nil return.

5) Select the tax obligation and click next.

6) Enter return period from to return period then click submit button

7) Once you are done, download the returns receipt.

NOTE: If you have ever filed an iT1 tax return before on the iTax portal, you can file a subsequent nil return through the iTax mobile app.

To do this, simply download the app from Google play store then log in with your PIN and iTax password. Click on file nil return, and select resident or non-resident individual and click submit.

Deadlines for different Taxes in Kenya

1. PAYE

Pay as you earn is paid by individuals in gainful employment. It is usually filed by the employer and should be filed on or before the 9th of the following month.

2. VAT 

Value Added Tax is billed on taxable goods or services that are either made in Kenya or imported.

VAT returns are to be submitted monthly on or before the 20th of the following month.

 3. Withholding Tax

This is an amount withheld by an employer from the employees’ wages and is remitted to KRA. The deducted amount depends on income, and if the employees is a resident or nonresident.

For this tax, the employer has to remit to KRA on or before the 20th day of the following month.

 4. Turnover Tax 

This tax was reintroduced through the Finance Act, 2019. And as of 1st January 2020, it is to be filed and paid every month. The due date is on or before the 20th of the following month.

5. Rental Income 

This is a tax payable on residential rental income between Kshs. 144,000 and Kshs. 10 million per annum.

It should be filed on or before the 20th of the following month.

6) Income Tax – Residence and Non Residence 

Income tax is a direct tax charged on any income derived from employment, business, pensions, rent, dividends, and interests among others. It should be filed yearly anytime between 1st January to 30th June of the following year.

Conclusion

Filling your tax returns may seem daunting. However, if you follow the above steps, you should be able to file your taxes easily. For Assistance on How to File Tax Returns in Kenya, our firm is an authorized tax agent with credibility in assisting you in all tax matters. Contact us, info@finsolutions.co.ke, Phone + 254 780216631

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About Author

Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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