As the June 30th tax filing deadline passed, the Kenya Revenue Authority (KRA) reported that nearly a million taxpayers, totalling 953,971 individuals, failed to submit their returns on time, facing potential penalties.

Official figures from KRA disclosed that by the deadline, 8,046,029 taxpayers had managed to file their returns, falling short of the anticipated nine million target. 

This figure marked a significant increase of 1.7 million filings compared to the same period last year.

KRA highlighted the consequences for those missing the deadline: a penalty of Sh2,000 or five per cent of the tax bill, whichever is higher, while companies could face a penalty of Sh10,000 or five per cent of their tax payable for the relevant year.

In the days leading up to June 30th, KRA processed over 100,000 filings daily, indicating a surge as the deadline approached.

Read More

  1. KRA chief summoned over alleged Sh62 billion tax evasion in palm oil import deal
  2. KRA reduces VAT refund processing time from 102 to 41 days in drive for efficiency
  3. Withholding Tax is not applicable on management, professional fees - TAT

To assist taxpayers in meeting their obligations, KRA extended operating hours across all service centres nationwide, including selected Huduma and contact centres.

Filing tax returns is crucial for KRA not only for revenue collection but also for identifying tax evasion, particularly given ongoing challenges in meeting revenue targets.

The law mandates that all individuals with a KRA personal identification number must file returns, irrespective of their employment status.

Recent years have seen KRA grappling with revenue shortfalls due to tax evasion and a narrow tax base that excludes many self-employed individuals and informal sector workers.

The first nine months of the current financial year, ending June 30th, saw KRA's largest shortfall in tax collections from employed individuals, despite the introduction of new tax bands aimed at high earners.

A quarterly report from the National Treasury underscored these challenges, revealing a significant shortfall in the PAYE target.

KRA aimed to collect Sh463.3 billion from salaries by March but only managed Sh390.96 billion, marking a shortfall of 15.6 per cent, the highest on record.

The situation highlights ongoing efforts by KRA to enhance compliance and expand the tax base to achieve sustainable revenue collection goals.