Should Students File KRA Income Tax Returns

Kenya operates on a self-assessment tax regime where each individual or businesses voluntarily declares their income received during the year and settles the resultant tax liability, if it exists.
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Yes, everyone with a KRA pin should file returns. A PIN is a Personal Identification Number used while doing business with Kenya Revenue Authority, other Government agencies and service providers. Tax returns are only filed for the year ended. For example, if you are filing your Individual Income Tax Returns, you can file for a particular year of income, anytime between 1st January to 30th June of the following year.

You are required to have a PIN if you are employed, in business, have rental income, wish to apply for a HELB Loan. Kenya operates on a self-assessment tax regime where each individual or businesses voluntarily declares their income received during the year and settles the resultant tax liability, if it exists. Where one did not accrue any income, then the law allows the taxpayer to file a nil return.

What is the penalty for late filing and paying?

Individual Income Tax Returns should be filed on or before 30th June of the following year.

The penalty on late filing is usually on whichever is higher between, 5% of the tax due or sh 20,000. For late payments, you pay 5% of the tax due and a late payment interest of 1% per month on the unpaid tax until the tax is paid in full.

Instances when you can use the KRA PIN

  • Registration of title, stamping of instruments by the Commissioner of Lands, and payment of Land Rent.
  • Approval of plans, payment of water deposits, application for a business permit, payment of Land Rent by Local Authorities.
  • Registration of Motor Vehicles, and licensing under the Traffic Act (Cap 403) by the Registrar of motor Vehicles.
  • Registration of Business Names and Companies by the Registrars of Business names and companies.
  • Trade licensing by the Ministry of Commerce.
  • Application for Value Added Tax registration.
  • Underwriting policies by Insurance Companies.
  • To facilitate importation of goods, Customs clearing and forwarding at the offices of Commissioner of Customs and Excise.
  • Payment of Deposits for power connections at Kenya Power and Lightning Co. Ltd.
  • To facilitate all contracts for supply of goods and services to all Government Ministries and Public bodies.

Submission of income tax returns is an online process done via iTax.

If you have no income to declare, please don’t forget you are required to file a NIL return.