If you have a KRA PIN, you are required to file your tax returns every year, even if you did not earn any income.
Filing nil returns is a simple and quick process that can save you from hefty fines and penalties.
In this article, we will show you how to file nil returns on the KRA iTax portal, the benefits of doing so, and the consequences of not filing.
What are nil returns?
Nil returns are tax returns that declare that you have no taxable income for a given period. You should file nil returns if you fall under any of the following categories:
- You are a student or unemployed and have no source of income.
- You are a salaried employee and your employer deducts and remits your taxes through PAYE.
- You are a business owner and your business did not generate any income or profit.
- You are a non-resident and have no income from Kenya.
Filing nil returns is a way of informing the Kenya Revenue Authority (KRA) that you are compliant with the tax laws and have no tax liability.
It also helps you to update your tax records and avoid future complications.
How to File Nil Returns on the KRA iTax Portal
The KRA iTax portal is the only authorized online platform for filing your tax returns. You need the following to access the portal:
- KRA PIN: A KRA PIN is a unique identification number that you need for various transactions, such as opening a bank account, registering a business, applying for a loan, etc. You can apply for a KRA PIN online through the iTax portal.
- iTax password: You receive an iTax password via email when you register for a KRA PIN. You can reset your password if you forget it.
To file nil returns on the iTax portal, follow these steps:
- Visit the iTax portal at and log in with your KRA PIN and password.
- On the dashboard, click on “Returns” and select “File Nil Return”.
- Select the tax obligation (Income Tax – Resident Individual) and the return period (e.g., 01/01/2022 to 31/12/2022).
- Click on “Submit” and confirm the details.
- You will receive an acknowledgment receipt with a reference number. You can download and print it for your records.
Alternatively, you can watch the video tutorials by the KRA on 2 and 3 to learn how to file nil returns for the year 2021 and 2022, respectively.
Benefits of Filing Nil Returns
Filing nil returns has several benefits, such as:
- It shows that you are a responsible and law-abiding citizen who fulfills your tax obligations.
- It helps you to maintain a good tax compliance certificate, which you may need for various purposes, such as applying for a government job, tender, scholarship, etc.
- It enables you to claim tax refunds or credits if you are eligible for any.
- It prevents you from accumulating tax arrears and penalties, which can affect your credit score and reputation.
Consequences of Not Filing Nil Returns
If you fail to file your tax returns, whether nil or not, you will face the following consequences:
- You will incur a late filing penalty of Ksh. 2,000 or 5% of the tax due, whichever is higher, for every month or part thereof that you delay.
- You will be denied a tax compliance certificate, which can affect your chances of getting various opportunities and services.
- You will be subject to tax audits and investigations, which can result in additional taxes, penalties, and interest.
- You will be liable for prosecution and legal action, which can result in fines or imprisonment.
Therefore, it is advisable to file your tax returns on time, even if you have no income, to avoid these negative outcomes.
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Conclusion
Filing nil returns is a simple and quick process that can save you from hefty fines and penalties.
You can file nil returns on the KRA iTax portal using your KRA PIN and password.
Filing nil returns shows that you are compliant with the tax laws and have no tax liability. It also helps you to update your tax records and avoid future complications.
If you fail to file your tax returns, you will face various consequences, such as penalties, audits, and prosecution.
Therefore, it is advisable to file your tax returns on time, even if you have no income, to avoid these negative outcomes.
