Kra itax: How to Best File Income Tax Returns

Kra itax is an online portal where you can log in and access Kra services at your convenience as a Kenyan citizen.

The Kenya Revenue Authority (KRA) has been tasked with assessing, collecting, and accounting for all revenues due under Kenyan law.

It is mandatory for every citizen to comply by filling out their annual income tax returns.

If you are out of employment within that year, you file nil returns.

Online services include pin registration, pin checker, return filing for both individuals and businesses, kra mobile services (m-services), and pin certificate download, among others.

With the ministry of treasury and economic planning being the parent agency, the cabinet secretary for finance may direct the authority to perform other functions related to revenue.

Tax returns in Kenya are classified as direct or indirect based on the individual or business.

Individuals and businesses pay direct taxes such as pay as you earn (PAYE), business companies and partnerships, and so on, whereas indirect taxes include value added tax (VAT), excise duty, and customs duty.

As an individual, it’s your obligation to file and pay for individual income tax, pay as you earn, withholding tax, tax compliance certificate (TCC), installation tax, advance tax, rental income tax, capital gains tax, value-added tax (VAT), and turnover tax.

In this article, we shall be looking at how you can easily file your annual income return on Kra i tax portal.

Let’s have some understanding of tax returns.

What is a tax return in Kenya?

 

A tax return is that declaration that you make as a tax payer when you give a summary of what you’ve earned and what you’ve paid in taxes in your year of income.

In Kenya, you should file your taxes between January 1st and June 30th of each year because the year of income for individuals runs from January 1st to December 31st.

Late filing will attract a 5% penalty on the tax due. Or Ksh. 2,000, whichever is higher for an individual.

Why is it important to file your tax returns?

 

• You are able to comply with the Kenyan tax laws, where every citizen with taxable income has to file returns.
• You are able to establish whether there are taxes due and payable or any refunds available at the end of the year.
• Your income under the pay-as-you earn (PAYE) system enables you to reconcile the tax deducted from you with the declaration made by your employer at the end of the year.

 

Biblical Perspective on Paying Taxes;

Romans 13/7(NIV)

Give to everyone what you owe him: If you owe taxes, pay taxes; revenue, then revenue; If respect, then respect; honor, then honor.

 

Authorities are designed by God, so when you submit to the authority, you are submitting to God.

We are therefore called upon to submit in truth and in faith, as it is God himself who provides for us.

 

Now, with all that said, let’s get started.

Annual Return Filing Process Using Kra itax

 

Firstly, you need a Kra Pin and a Kra itax Password.

You have to create your kra itax portal account by simply logging into kra itax if you are a first-timer

The system will automatically generate a password, which will then be sent to the email address you used to register for your kra pin.

You can then use the credentials to complete the process.

Your first log-in will prompt you to answer a security question, which will serve as your security credentials needed to reset your password in case you forget it.

Even if you forget the pin, the Kra itax portal allows you to reset your password by prompting the following steps:

 

1. Log in to kra itax
2. Enter your kra pin
3. Click continue
4. On the bottom right-hand side below the log-in button, click forgot password/unlock account
5. Answer the security question as per the first log-in prompt
6. Kra will send a new password to your email
7. Change the password to something you can easily remember if you choose to

 

Now armed with your Kra pin and password, if you are unemployed, let’s take this easy route of filing your Nil returns on Kra itax.

How to File Your Nil Returns on Kra itax

 

1. Log onto Kra itax.
2. Enter your kra pin and password
3. Select Returns On the drop-down menu, click Nil Return
4. Select your income tax status under tax obligation
5. Click next
6. The return period from and return period to will have been populated, i.e. 01/01/2022 to 31/12/2022
7. Click on submit to get your acknowledgement receipt from Kra.
8. And that’s all for your 2022 annual NIL tax return.

How to File Kra Nil Returns on Your Phone

 

1. Download and install your m-service app from the Google Play Store.
2. Log in using your kra pin or Kenyan ID and password if you are already registered
3. Sign up if you are a first-timer using your ID and pin in order to register
4. You will be requested to fill in your details then there will be a pop-up message with your pin and name
5. Press OK and log in
6. On home menu, press tax returns
7. Then press Nil returns
8. Select individual income tax resident (ITR) on the tax obligation
9. Enter your filing period as 2022 and press OK
10. Press proceed
11. You will get a message to confirm your successful filling out of nil returns.

Are you employed?

 

For your information, though, before we start, I thought you should know

 

Your allowable deductions include:

a) Mortgage Interest Deduction

 

This is interest paid on any amount borrowed from the first five financial institutions as specified in the Income Tax Act.

It is deducted from your employment income, whether you bought a home or improved the premises you occupy for residential purposes.

The deduction is currently up to a maximum of Ksh 300,000 annually.

b)Pension Contribution

 

The allowed deduction has a limit of up to Ksh 20,000 in a month.

Your tax reliefs includes:

a)Personal Relief

 

As a resident individual, you are eligible for personal relief to lighten your tax burden.

The current amount set is Ksh 2,400 per month, or Ksh 28,800 per year.

b)Insurance Relief

 

If you have paid your insurance premiums for life, health, or education policies for yourself and your dependents, then you qualify.

You will get insurance relief of 15% of premiums paid to a maximum of Ksh 60,000 in a year.

Your education and health policies should have a maturity period of at least 10 years.

Contributions made to the NHIF after January 1, 2022 are also eligible for the relief.

Now you know. Let’s go…

Your Step-by-Step Guide in Filing Your 2022 Income Tax Return on Kra itax

 

First, you will need a P9 form that is issued by your employer.

 

Then;

1. Log onto the itax portal using your pin and password
2. On the returns menu, select file returns
3. Select income tax—residence individual as tax obligation
4. Click next
5. Download the Excel/ODS template using the link that is provided.

How to Fill the Downloaded Excel Template

 

1. Fill in all the mandatory details for basic information sheet of the return
2. Click on next to proceed
3. Fill in the details of employment income for the year 2022 for the employment income section
4. Specify the gross income that you earned between January and March 2022 and April and December 2022.
5. Along with that, also specify the pension contributions as indicated on the P9 form that was provided by your employer.
6. Fill the PAYE details as per the P9 form for the year 2022 at the PAYE deducted section
7. If you have mortgage interest, select computation mortgage, and an extra sheet will open up.
8. Fill in the sheet based on the mortgage interest paid between January and March 2022 and April and December 2022.
9. If you have a house ownership savings plan, select home ownership savings plan, and an extra sheet will open up.
10. Complete the sheet based on the HOSP contribution for the period between January–March 2022 and April–December 2022, respectively.
11. Go to the tax computation and capture your total contribution made for a pension in the year 2022. it should actually tally with the amount declared above (step 5) on P9 form from your employer
12. Your personal relief for the year 2022 can now be captured.
13. Confirm your tax due or return
14. To validate the return and generate a file for upload to kra itax, click Validate
15. If you have business income, complete the sections required for your business in the basic information section.
16. Go back to the returns menu and select file returns so as to complete the process
17. Choose an income-tax-residential individual as your tax obligation
18. Click next,and then browse to upload your zip file
19. Submit your 2022 income return.

 

And that’s it….