Filing your tax returns is an essential responsibility for every taxpayer. In Kenya, the Kenya Revenue Authority (KRA) is the body mandated to assess, collect, and account for all revenues in accordance with the laws of Kenya. Filing KRA returns might seem daunting, but with the right guidance, it can be a straightforward process. This blog will walk you through the steps of filing your KRA returns, provide useful tips, and answer some frequently asked questions (FAQs).
Why is Filing KRA Returns Important?
Filing your KRA returns is not only a legal requirement but also a way to ensure that you are in compliance with the tax laws of Kenya. Failure to file your returns can result in penalties and interest on any unpaid taxes. Additionally, filing your returns on time helps in maintaining a good record with the KRA, which can be beneficial in various aspects of financial and legal matters.
Types of KRA Returns
Before we delve into the filing process, it is essential to understand the different types of returns that you may need to file:
- Individual Income Tax Returns (ITR): For individual taxpayers including employees, sole proprietors, and landlords.
- Corporate Tax Returns: For companies and businesses.
- Value Added Tax (VAT) Returns: For businesses registered for VAT.
- Pay As You Earn (PAYE) Returns: For employers.
- Excise Duty Returns: For businesses dealing in excisable goods and services.
Step-by-Step Guide to Filing KRA Returns
Step 1: Obtain a KRA PIN
To file your returns, you need to have a Personal Identification Number (PIN) issued by the KRA. If you do not have a KRA PIN, you can apply for one online through the iTax portal.
How to Apply for a KRA PIN:
- Visit the KRA iTax portal at itax.kra.go.ke.
- Click on the “New PIN Registration” link.
- Fill in the required details, including your personal information, address, and contact details.
- Submit the application and wait for confirmation.
Once you have your KRA PIN, you can proceed to file your returns.
Step 2: Gather Required Documents
Before you start the filing process, gather all the necessary documents. These may include:
- P9 Form (for employees)
- Bank statements
- Receipts and invoices
- Business financial statements (for businesses)
- Rental income details (for landlords)
Step 3: Log In to the iTax Portal
- Visit the KRA iTax portal at itax.kra.go.ke.
- Enter your KRA PIN and password to log in. If you have forgotten your password, you can reset it by following the “Forgot Password” link.
Step 4: Select the Type of Return
Once logged in, select the type of return you wish to file. For individual taxpayers, this will typically be the Individual Income Tax Return (ITR).
Step 5: Fill in the Return Form
- Download the relevant return form from the iTax portal.
- Fill in the form with the required information. Ensure that all details are accurate and complete.
- If you are an employee, use the information from your P9 form to fill in the income details.
- For business income, provide details of your business income and expenses.
Step 6: Upload the Completed Return Form
- Once you have completed the return form, upload it to the iTax portal.
- Ensure that the form is in the correct format (Excel or PDF) as specified by the KRA.
Step 7: Submit the Return
- After uploading the return form, review all the information to ensure it is correct.
- Click the “Submit” button to file your return.
Step 8: Acknowledgment Receipt
After successfully submitting your return, you will receive an acknowledgment receipt. This receipt serves as proof that you have filed your return. Save and print a copy for your records.
Common Mistakes to Avoid
- Late Filing: Ensure you file your returns before the deadline to avoid penalties.
- Incorrect Information: Double-check all details to ensure accuracy.
- Missing Documents: Have all required documents ready before you start the filing process.
- Failing to Declare All Income: Ensure you declare all sources of income to avoid issues with the KRA.
Tips for a Smooth Filing Process
- Start Early: Begin the filing process well before the deadline to avoid last-minute rushes.
- Seek Professional Help: If you are unsure about any aspect of the filing process, consider consulting a tax professional.
- Keep Records: Maintain organized records of all financial transactions and documents.
- Stay Informed: Keep up-to-date with any changes in tax laws and regulations.
FAQs about Filing KRA Returns
1. What is the deadline for filing KRA returns?
The deadline for filing individual income tax returns is June 30th of each year. However, deadlines for other types of returns may vary, so it is important to check the specific requirements for your type of return.
2. What happens if I do not file my returns on time?
Failure to file your returns on time can result in penalties and interest on any unpaid taxes. The KRA may also take legal action to recover any outstanding amounts.
3. Can I file my returns manually?
No, all returns must be filed online through the KRA iTax portal.
4. What should I do if I make a mistake on my return?
If you realize you have made a mistake on your return, you can file an amended return to correct the error. Ensure you do this as soon as possible to avoid any penalties.
5. Do I need to file a return if I have no income?
Yes, you are still required to file a nil return if you have no income for the year. Failure to do so can result in penalties.
6. How can I check the status of my return?
You can check the status of your return by logging into the iTax portal and navigating to the “Status” section. Here, you will see updates on the processing of your return.
7. What documents do I need to file my returns?
The documents required will depend on your sources of income. Common documents include the P9 form (for employees), bank statements, receipts, invoices, and business financial statements.
8. Can I get assistance from KRA in filing my returns?
Yes, the KRA offers support to taxpayers through their customer service centers, call centers, and online resources. You can visit a KRA office or contact their support team for assistance.
9. What are the penalties for late filing?
The penalties for late filing vary depending on the type of return and the duration of the delay. It is best to file on time to avoid any penalties.
10. How do I reset my iTax password?
If you have forgotten your iTax password, you can reset it by clicking on the “Forgot Password” link on the iTax login page and following the instructions.
Bottom Line
Filing your KRA returns is a crucial part of complying with Kenya’s tax laws. By following the steps outlined in this guide, you can ensure that your returns are filed accurately and on time. Remember to stay organized, keep accurate records, and seek professional help if needed. Filing your returns not only keeps you in good standing with the KRA but also contributes to the overall development and growth of the country.