How to File Nil Returns: A Guide for Kenyan Taxpayers

Filing NIL returns in Kenya is a mandatory process for those who have a valid KRA (Kenya Revenue Authority) PIN but have not earned any income or paid taxes in a given financial year. This guide offers detailed instructions and essential information for Kenyan taxpayers on how to complete this process efficiently.

RELATED: Download Walmart app for Free

Introduction

Filing NIL returns is crucial for Kenyan taxpayers who didn’t generate income during the financial year. It’s a declaration to the KRA that no taxable income was earned, and thus, no tax was payable. This procedure is essential to maintain compliance with tax regulations and avoid penalties.

Requirements for Filing NIL Returns

1. KRA PIN: A Kenya Revenue Authority Personal Identification Number is mandatory for logging in to the iTax portal.
2. iTax Password: Received via email during the KRA PIN registration process; it can be reset if forgotten.
3. Internet Connection: Access to the iTax portal requires an internet connection​​.

Filing NIL Returns for Students and Unemployed

• Filing NIL returns is straightforward and doesn’t require technical expertise.
• It can be done using a phone, laptop, or desktop computer with an internet connection.
• This process eliminates the need to visit Huduma Centres or cybercafés​​.

Step-by-Step Procedure

1. Access the iTax Portal:
   • Visit itax.kra.go.ke directly or access it via the official KRA website at www.kra.go.ke and click “File returns”​​.
2. Login to the iTax Portal:
   • Enter your KRA PIN or user ID.
   • Answer a numerical security question for verification.
   • In case of a forgotten password, use the password recovery link provided via email​​.
3. Select File NIL Returns and Fill in Required Sections:
   • Click on “Returns” and choose “File NIL returns”.
   • Select “Self” in the type section and choose “Income Tax – Resident” under Tax Obligation.
   • Click “Next” to proceed​​.
4. Income Tax-Return Period Page:
   • Click “Submit” and acknowledge the message that pops up​​.
5. Download the KRA Returns Receipt:
   • The receipt will be sent to your email. It serves as proof of filing KRA returns online​​.

Filing Zero-Income Tax Returns

• Individuals with zero income in the tax year can file a zero-income tax return, falling in the same category as those filing NIL returns​​.

Penalties for Late or Non-Filing

• Failure to file NIL returns can result in penalties.
• For individual taxpayers, the penalty is 5% of the tax due or Kshs 2,000, whichever is higher.
• For businesses, the penalty for late filing is 25% of the tax due or Kshs 10,000 (whichever is higher) and a monthly late payment interest of 1% on the unpaid tax. Not filing returns incurs a penalty of 10% of the tax involved, up to a maximum of Kshs 1 million​​​​.
• As per the Tax Procedures Act, failing to file annual returns by the due date results in an additional tax equal to 5% of the normal tax or Ksh. 10,000 for Non-Individual Taxpayers​​.

Filing NIL returns is a significant responsibility for every taxpayer with a KRA PIN. The process, predominantly online, is designed to be user-friendly and efficient, ensuring compliance with tax laws and regulations in Kenya.