Filing Nil KRA Returns may seem like an unnecessary chore to many, but it is a crucial process that must be followed by every taxpayer.
The Kenya Revenue Authority (KRA) requires taxpayers to file their returns annually, even if they did not earn any income during the year.
Failing to file these returns can result in penalties and even legal action. In this article, we will provide a step-by-step guide on how to file nil KRA returns to ensure you stay compliant with tax regulations.
Whether you are an individual taxpayer or a business owner, this article will provide you with all the information you need to file your nil KRA returns without any hassles.
What is a Nil Return?
Before we dive into the process of filing a nil return on iTax, it’s important to understand what a nil return is.
A nil return is filed when an individual or business has no taxable income or has no tax liability for a particular tax period.
This means that there is nothing to report to the tax authority, and therefore, no tax is due.
How to file Nil KRA returns on iTax
- Step 1: Login to iTax
The first step in filing a nil return on iTax is to log in to the iTax portal using your KRA PIN and password. If you don’t have an iTax account, you can register for one on the iTax website.
- Step 2: Navigate to the Returns Menu
Once you have logged in to iTax, navigate to the “Returns” menu on the left side of the page. Select “File Nil Return” from the drop-down menu.
- Step 3: Select the Appropriate Tax Obligation
Next, you will be prompted to select the tax obligation for which you want to file a nil return.
This could be Income Tax, Value Added Tax (VAT), or any other tax obligation that you are registered for.
- Step 4: Select the Appropriate Return Period
After selecting the tax obligation, you will be prompted to select the return period for which you want to file a nil return.
The return period is usually a month or a quarter, depending on the tax obligation.
- Step 5: Confirm Nil Return Filing
Once you have selected the return period, you will be asked to confirm that you want to file a nil return. Click on the “Submit” button to confirm your decision.
- Step 6: Download the Acknowledgment Receipt
After submitting your nil return, you will be redirected to a page showing the details of your filing.
It’s important to download the acknowledgment receipt, which is proof that you have filed a nil return.
You can download the acknowledgment receipt by clicking on the “Print Receipt” button.
How to check for KRA penalties
- Step 1: Log in to https://itax.kra.go.ke/KRA-Portal/
- Step 2: Enter your KRA PIN, then click continue. Enter your password and Security Stamp (answer the arithmetic sum) and click login.
- Step 3: On the dashboard, select My Ledger. A drop down will appear, click on General Ledger.
- Step 4: Fill in all the tabs.
- Step 5: Under transaction type select penalty.
- Step 6: For Account type click on Taxpayer Main Account.
- Step 7: Tax Head/SubHead select your preferred inquiry i.e Taxpayer Main Account, Advance Payment
- Step 8: For the duration tabs, key in the period you have queries on. When done, click on the show ledger.
If successful, a tab will appear on your screen with the data. Your records will show whether you have penalties or not.
How to pay for KRA penalties
To remit penalties and interest, here is a guide for the taxpayer.Â
- Step 1: Still on the dashboard select Payment.
- Step 2: Click on payment registration and follow the directions to pay for a penalty.
- Step 3: Fill in your details, an electronic slip (E-Slip) will be generated. Download it. The E-slip will contain a payment registration number. Use it as the account number when paying via M-Pesa.
Paying with M-Pesa
- On the M-Pesa menu, select Paybill. Enter KRA Account Number as 572572 as the business number.
- For the account number, enter the registration number.
- Enter the amount due. Â You will receive a confirmation message from M-Pesa.