The Kenya Revenue Authority (KRA) requires Kenyan citizens and other residents in the country, including businessmen and women to file tax returns every year.
The returns reflect the amount of taxes that they have paid, and present a record of possible tax refunds for taxpayers.
However, very few Kenyans file their returns, and those who do so file in the last minute. Kenyans have a period of six months, between January and June every year, but most tax return files are done in June.
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In a population of over 50 million Kenyans, according to KRA data, about 5.5 million taxpayers filed their returns in 2021. The number of registered taxpayers using iTax marginally grew from 3.6 million in 2019 to 5.5 million in 2021. This number is expected to grow to 8.2 million by 2023.
Offenses related to failing to pay taxes and file KRA tax returns
Tax offenses can attract punitive penalties and interest. These include:
- Failure to deduct PAYE, account for it or to submit a certificate upon request.
The penalty for this offence is Ksh10,000 or 25 percent of the amount of the tax involved, whichever is greater.
2. Failure to deduct or remit Withholding Tax
The penalty is 10 percent of the amount of the tax involved, up to a maximum of Ksh1 million.
3. Failure to remit Excise Duty or VAT
The penalty is five percent of the amount of the tax due or Ksh10,000, whichever is greater.
4. Failure to pay tax on due date
The penalty is 20 percent of the tax involved.
5. Failure to file annual returns by the due date
The penalty is an additional tax equal to five percent of the normal tax, or Ksh10,000 in for non-individual taxpayers.
