The Kenya Revenue Authority (KRA) has reinstated the Nil Return filing option. This follows successful system validations aimed at strengthening tax compliance. The move comes ahead of the 2025 income tax return cycle, which ends in June 2026. It also eases concerns after KRA temporarily suspended the option in January.
KRA’s Business Strategy Department confirmed the reinstated Nil Return filing applies only to 2025 returns filed after March 31, 2026. Enhanced validation checks in iTax will be active by then. The change does not affect current filings for 2024 or earlier periods. Monthly obligations like PAYE, excise duty, MRI, and TOT continue as usual.
The earlier suspension caused confusion. Many individuals and small businesses were unsure how to file. Some had no declared income but showed financial activity through third-party data. They mistakenly thought they qualified for a Nil return.
However, KRA found widespread misuse. Commissioner George Obell said 392,162 taxpayers filed Nil returns for 2024—even though withholding tax was deducted from their 2025 income. “We see transactions in their accounts,” he explained. “Yet they reported zero income.”
Obell clarified a key misunderstanding. Withholding tax—5% on professional fees or 3% on contracts—is not a final tax. “It is an advance payment,” he stressed. To prevent omissions, KRA now prepopulates returns using external data. “Your income will already appear when you log in,” he said. “You can’t ignore it.”
Taxpayers who see pre-filled income but stay silent may face audits. “We’ll contact those who don’t respond,” Obell warned. “That could trigger reviews of prior years too.”
This effort supports KRA’s Income and Expenditure Verification Programme, launched January 1, 2026. It uses data from eTIMS, tax certificates, and import records. The eTIMS system tracks real-time transactions across the economy.
KRA also urges taxpayers to verify their PINs on iTax. Accurate details ensure smooth processing. Deputy Commissioner Patience Njau said the 2026 goal is clear: convert non-filers and improper Nil filers into compliant taxpayers. “We aim to bring them into the system fairly,” she said.
In short, KRA has restored Nil Return filing—but with stronger safeguards. Only truly eligible taxpayers should use it. Thanks to better data and automation, KRA can now detect discrepancies faster and promote honest reporting.
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